Reference no: EM132580398

ADCITED is a business that specialises in making signs for their customers. Each sign is different, so ADCITED uses a job costing system.

ADCITED uses predetermined overhead recovery rates to apply overheads (indirect costs) to jobs. ADCITED segments overheads into 'general' overheads, which are applied on a direct labour hours basis, and 'machine-related' overheads, which are applied on a machine hours basis.

ADCITED uses cost-plus pricing, with 30% mark-up applied to the full cost of each job.

The following annual figures are budgeted for ADCITED:

General overheads $68,400

Machine-related overheads $36,000

Direct labour costs $114,000

Direct labour hours 3,800

Machine hours 1,200

A customer asks ADCITED to quote a job for them, to make all the signs for their new store.

ADCITED estimates the following for the quote:

Direct materials used $9,400

Direct labour hours used 20

Machine hours used 6

Question 1: Calculate the overhead recovery rates for ADCITED. Show your workings.

Question 2: Calculate the full cost of the job being quoted. Show your workings.

Question 3: What price should ADCITED quote to their customer for the job? Give your answer to the nearest whole dollar (0 d.p.)