Accounting 9706 · AS & A Level · Traditional costing methods

Traditional costing methods — practice question

A business has been commissioned to produce a new machine for a customer. The following estimates are given. Materials are expected to cost $1100. Labour will take 30 hours and will cost $14 per hour. The business applies overheads at $10 for each labour hour and adds a mark-up of 30% to the total cost. What is the price on the job cost sheet?

  • A$1520
  • B$1820
  • C$1976
  • D$2366

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