13 Feb An engineering firm operates a job costing system.
An engineering firm operates a job costing system. Production overhead is absorbed at the rateof $8.50 per machine hour. In order to allow for non-production overhead costs and profit, amark up of 60% of prime cost is added to the production cost when preparing price estimates.The estimated requirements of job number 808 are as follows:Direct materials $10,650Direct labour $3,260Machine hours 140The estimated price notified to the customer for job number 808 will beA. $22,256B. $22,851C. $23,446D. $24,160C01-Fundamentals of management accountingUpdated: October 2013 4Question 12The diagram represents the behaviour of a cost item as the level of output changes.Which ONE of the following situations is described by the graph?A. Discounts are received on additional purchases of material when certain quantities arepurchased.B. Employees are paid a guaranteed weekly wage, together with bonuses for higher levelsof production.C. A licence is purchased from the government which allows unlimited production.D. Additional space is rented to cope with the need to increase production.