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The Overdale plant has two categories of overhead: maintenance and inspection. Costs expected for these categories for the coming year are as follows:
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Maintenance
A??L120,000
Inspection
A??L200,000
The plant currently applies overhead during direct labour hours and expected capacity of 80,000 direct labour hours. The following data has been assembled for use in developing a bid for a proposed job:
|
Direct materials |
A??L1,500 |
|
Direct labour |
A??L5,000 |
|
Machine hours |
400 |
|
Number of inspections |
6 |
|
Direct labour hours |
750 |
Using direct labour hours to assign overhead, the total cost of the potential job would be:
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A??L9,500
-
A??L6,000
-
A??L3,000
-
A??L1,600