An engineering firm operates a job costing system. Production overhead is absorbed at the rate of $8.50 per machine hour. In order to allow for non-production overhead costs and profit, a make up of 60% of prime cost is added to the production cost when preparing price estimates. The estimated requirements of job number 808 are as follows:
|
Direct materials |
$10 650 |
|
Direct labour |
$3 260 |
|
Machine hours |
140 |
The estimated price notified to the customer for job number 808 will be
A $22 256 B $22 851 C $23 446 D $24 160