Accounting 9706 · AS & A Level · Traditional costing methods

Traditional costing methods — practice question

For a particular wedding jewellery job, Ammu gave the following details: materials cost is $\$10\,000$; Ammu needs $10$ hours at $\$125$ per hour to design the jewellery; her assistant needs $100$ hours at $\$70$ per hour to make the jewellery; fixed overheads are absorbed at $\$50$ per labour hour; a mark-up of $20\%$ is to be applied. What price should be quoted for the wedding jewellery job?

  • A$\$21\,900$
  • B$\$23\,750$
  • C$\$26\,400$
  • D$\$28\,500$

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