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Question - JOB COSTING (QUICK EASY QUESTION) (TOOK ME ONLY 10 MINUTES TO DO)
Janavee Construction applies all overhead to jobs on the basis of direct labor hours. This period, manufacturing overhead is budgeted to be $1,800,000, and direct labor hours are budgeted to be 90,000. Janavee pays direct labor $12/hour.
Janavee bid on a job that it estimated would require $200,000 in direct materials and 10,000 direct labor hours. Janavee's bidding policy is to add 50% to the estimated manufacturing cost of a job to cover operating expenses and produce a profit.
Janavee won the bid and completed the job, whose total cost came in at 105% of projected cost. 7% of that cost was spent on construction that was ruined due to weather conditions and had to be rebuilt. This occurrence was considered a normal part of the construction process.
How much did Janavee bid on the job?
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