The engineering firm of Dobbs and Smith uses a job order costing system to accumulate client-related costs. The overhead rate is 60% of direct labor cost. Staff engineer's time is charged at a rate of $80 per hour. A recent job for a client involved 30 staff labor hours. How much was the total job cost?

Question

Quizplus · Accepted Answer

The total job cost includes direct labor and applied overhead. Direct labor cost is 30 hours * $80/hour = $2,400. Overhead is 60% of direct labor, so $2,400 * 0.60 = $1,440. Total job cost is $2,400 + $1,440 = $3,840.

The Engineering Firm of Dobbs and Smith Uses a Job