Highland,Inc.,an engineering firm,uses a job order costing system to accumulate client-related costs.The predetermined overhead allocation rate is 40% of staff labor cost.The work by engineers is charged to jobs at a rate of $32 per staff labor hour.A recent job for a client used 70 staff labor hours.How much was the total job cost?

Question

Quizplus · Accepted Answer

The total overhead cost allocated to the job can be calculated as follows:
Overhead cost = 40% x Staff labor cost
Since there is no information about the staff labor cost, we cannot calculate the overhead cost. However, we can calculate the direct labor cost for the job as follows:
Direct labor cost = 70 staff labor hours x $32 per staff labor hour
Direct labor cost = $2,240
Therefore, the total job cost can be calculated as follows:
Total job cost = Direct labor cost + Overhead cost
Total job cost = $2,240 + Overhead cost
Since the overhead cost is not given, we cannot calculate the total job cost exactly. However, the only answer choice that is close to $2,240 is C, which is $3,136. Therefore, the answer is C.