A company is planning to bid for a one-month contract. It has sufficient spare labour and machine capacity to carry out the contract without affecting other activities. Costs associated with the contract would be as follows: Direct materials Direct labour Variable overheads Depreciation $ 12,440 18,300 6,020 2,000 an addition, it is estimated that a supervisor will need to spend 50% of their time on that contract. The supervisor is paid $3,500 a month. What is the relevant cost of the contract? O $18,460 O $14,190 $12,440 $20,210
A company is planning to bid for a one-month contract. It has sufficient spare labour and machine capacity to carry out the contract without affecting other activities. Costs associated with the contract would be as follows: Direct materials Direct labour Variable overheads Depreciation $ 12,440 18,300 6,020 2,000 an addition, it is estimated that a supervisor will need to spend 50% of their time on that contract. The supervisor is paid $3,500 a month. What is the relevant cost of the contract? O $18,460 O $14,190 $12,440 $20,210
Chapter6: Activity-based, Variable, And Absorption Costing
Section: Chapter Questions
Problem 1PA: Colonels uses a traditional cost system and estimates next years overhead will be $480,000, with the...
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