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: What price does Acron charge for Job 126?
$\begin{array}{ll}
\text { Direct materials } & \$ 60,000 \
\text { Direct labour } & \$ 46,000
\end{array}$
A)$46,800
B)$65,400
C)$86,000
D)$148,400

Question

Quizplus · Accepted Answer

The total cost of direct materials and direct labor is $60,000 + $46,000 = $106,000. Acron charges an additional 40% on this cost. So, the price charged is $106,000 + ($106,000 * 40%) = $106,000 + $42,400 = $148,400.

Acron Construction Charges Each Customer a Price Equal to the Cost