The engineering firm of Dobbs and Smith uses a job order costing system to accumulate client-related costs.The overhead rate is 65% of direct labour cost.Staff engineer's time is charged at a rate of $100 per hour.A recent job for a client involved 30 staff labour hours.How much was the total job cost?

Question

Quizplus · Accepted Answer

The direct labour cost would be 30 hours x $100 per hour = $3000.
Then the overhead cost would be 65% of the direct labour cost = 0.65 x $3000 = $1950.
Therefore, the total job cost would be the sum of direct labour cost and overhead cost = $3000 + $1950 = $4950.

The Engineering Firm of Dobbs and Smith Uses a Job