Skilled labour at a manufacturing plant is in short supply, and all available skilled labour time is fully utilised. A customer has asked for a special job that will cost $400 in direct materials and will require 15 hours of skilled labour time. Skilled labour costs $8 per hour and variable production overhead is $2 per hour. Fixed production overheads are absorbed at a rate of $20 per skilled labour hour. If the job is undertaken the skilled labour will be withdrawn from work on making items that earn a contribution of $25 per skilled labour hour. What is the minimum price that should be charged if this special job is undertaken? O $775 O $895 O $925 O $1,225

Skilled labour at a manufacturing plant is in short supply, and all available skilled labour time is fully utilised. A customer has asked for a special job that will cost $400 in direct materials and will require 15 hours of skilled labour time. Skilled labour costs $8 per hour and variable production overhead is $2 per hour. Fixed production overheads are absorbed at a rate of $20 per skilled labour hour. If the job is undertaken the skilled labour will be withdrawn from work on making items that earn a contribution of $25 per skilled labour hour. What is the minimum price that should be charged if this special job is undertaken? O $775 O $895 O $925 O $1,225

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter23: Evaluating Variances From Standard Costs

Section: Chapter Questions

Problem 1MAD: Advent Software uses standards to manage the cost of the programming staff. There are two programmer...

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