Accounting 9706 · AS & A Level · Traditional costing methods

Traditional costing methods — practice question

A manufacturing enterprise has the budgeted annual figures below. direct wages ($\$12$ per labour hour) $600\,000$ fixed overheads $160\,000$ Fixed overheads are allocated using direct labour hours as the basis. A job uses direct materials with a cost of $\$480$ and requires $30$ labour hours. The business wants to earn a profit margin of $25\%$ on this job. What price should be quoted for this job?

  • A$1170$
  • B$1248$
  • C$1270$
  • D$1404$

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