Auckland Sails Limited makes sails for small sailing boats on a made-to-measure basis.

The following costs are expected to be incurred by the company during the next month:

Indirect labour cost	$27,000
Direct labour time	4,000 hours
Depreciation (wear and tear) of machinery	$9,000
Rent and rates	$15,000
Direct labour costs	$100,000
Heating, lighting and power	$6,000
Machine time	2,000 hours
Indirect materials	$2,000
Other miscellaneous indirect costs	$1,000
Direct materials cost	$9,000

The company has received an inquiry about a sail that is estimated to take 12 direct labour hours to make, and to require 20 square metres of sailcloth costing $6 per square metre.

The company normally uses a direct labour hour basis of charging overheads to individual jobs.

Required (show your calculation):

a) What is the job cost of making the sail detailed above

Answer rating: 100% (QA)

Direct materials cost 20 x 6 Direct materials cost 120 Direct l... View the full answer