Acron Construction charges each customer a price equal to the cost of direct materials and direct labour plus 40%. Job 126 included the following costs: Direct materials $60,000
Direct labour $46,000
What price does the company charge for Job 126?
A) $46,800
B) $65,400
C) $86,000
D) $148,400

Question

Quizplus · Accepted Answer

The total cost for Job 126 is the sum of direct materials ($60,000) and direct labour ($46,000), which equals $106,000. The company charges an additional 40% on top of this cost, so the price charged is $106,000 + (0.40 * $106,000) = $148,400.

Acron Construction Charges Each Customer a Price Equal to the Cost