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Neptune Accounting Services expects its accountants to work for 26 comma 000 direct labor hours per year. The​ company's estimated total indirect costs are $ 221 comma 000. The direct labor rate is $ 70 per hour. The company uses direct labor hours as the allocation base for indirect costs. If Neptune performs a job requiring 30 hours of direct​ labor, what is the total job​ cost?

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Kolawole845

Answer:

Total job cost =$2,355

Explanation:

The overheads would be charged to the job using an overhead absorption rate determined using the labour hours.

The overhead absorption rate = Estimated overhead/Estimated labour hours

=$221,000/26,000 hours

=$8.5  per hour

Total cost of jobs = Direct labour cost + Indirect coat

                            = ($70 ×30)+ (8.5× 30)

                            =$2,355

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