If you had a Job Costing job that had $100 in DM, $200 of DL and $150 of Applied Overhead the customer would be charged?
$450 of your cost plus a profit margin determined by management. |
$350 |
$300 |
$450 |
Direct materials = $100
Direct labor = $200
Actual overhead = $150
Total cost of the job = Direct materials + Direct labor + Actual overhead
= 100+200+150
= $450
Over the total cost of the job, there must a profit margin. Hence, the customer would be charged $450 of the cost plus a profit margin determined by management.
First option is correct.
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