Reference no: EM133021

Question :

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 evaluated would need $200,000 in direct materials and 10,000 direct labor hours. Janavee's bidding policy is to add 50 percent to evaluate manufacturing cost of a job to cover operating expenses and produce a profit.

Janavee won the bid and do the job, whose net 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.

1. How much did Janavee bid on the job?