Bob's Powerwasher Company makes custom powerwashers for individual customers. On April 1, one job was in process, Job 900, which had a cost of $45,650. Jobs 901, 902, and 903 were started during the month of July. Data on costs added during the month are as follows:
Overhead is applied to production at the rate of 85% of direct labour cost. Job 903 was completed on April 26, and the client was billed at cost plus 45%. All other jobs remained in process.
$\begin{array}{lllll}&\text { Job } 900&\text { Job } 901&\text { Job } 902&\text { Job } 903\
\text { Direct Materials } & \$ 12,500 & \$ 6,740 & \$ 2,520 & \$ 7,870 \
\text { Direct Labour } & \$ 5,880 & \$ 10,280 & \$ 3,760 & \$ 11,360
\end{array}$
-Refer to the Figure.What is the price of Job 903?

Question

Bob's Powerwasher Company makes custom powerwashers for individual customers. On April 1, one job was in process, Job 900, which had a cost of $45,650. Jobs 901, 902, and 903 were started during the month of July. Data on costs added during the month are as follows:
Overhead is applied to production at the rate of 85% of direct labour cost. Job 903 was completed on April 26, and the client was billed at cost plus 45%. All other jobs remained in process.
 $\begin{array}{lllll}&\text { Job } 900&\text { Job } 901&\text { Job } 902&\text { Job } 903\
\text { Direct Materials } & \$ 12,500 & \$ 6,740 & \$ 2,520 & \$ 7,870 \
\text { Direct Labour } & \$ 5,880 & \$ 10,280 & \$ 3,760 & \$ 11,360
\end{array}$
-Refer to the Figure.What is the price of Job 903?

Quizplus · Accepted Answer

First, calculate the total cost for Job 903, including direct materials, direct labor, and overhead. Overhead = 85% of direct labor cost = 0.85 * $11,360 = $9,656. Total cost = Direct Materials + Direct Labor + Overhead = $7,870 + $11,360 + $9,656 = $28,886. The client is billed at cost plus 45%, so the price = $28,886 * 1.45 = $41,884.70.

Bob's Powerwasher Company Makes Custom Powerwashers for Individual Customers -Refer to the Figure