Question: John an engineer operates a job costing system. Production overhead is absorbed at the rate of 11 per labour hour. To allow for non-production overhead

  1. John an engineer operates a job costing system. Production overhead is absorbed at the rate of 11 per labour hour. To allow for non-production overhead costs and profit, a mark-up of 40% of prime cost is added to the production cost when preparing price estimates.

The estimated requirements of job number 001 are as follows:

Direct materials = 32,000

Direct labour = 21,000

Labour hours 110.

The estimated price notified to the customer for job number 001 will be?

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