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Hi. I am having an issue in determining the cost to be absorbed. This is from the CBE mock exam and no workings are available.
A business operates a job costing system and has the aim of making a net profit of 30% of net sales. Cost estimates for one particular job are as follows:
Direct materials 80 Kg at $5 per kg
Direct Labour: 40 hours at $6 per hour
The total overheads are budgeted at $120,000 and are absorbed on the basis of direct labour hours. The budgeted labour hours are 50,000.What price should be quoted for this job (to the nearest $)?
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