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The variable production cost per unit and the total fixed production cost both remain constant
in the range of activity show. What is the level of fixed costs?
2. A company operates a job costing system. The estimated costs for job 123 are as follows.
Direct labour 16 hours @ $ 10 per hour
Direct material 7 hours @ $ 22 per hour
Variable production overheads are recovered at the rate of $3 per direct labour hour.
Fixed production overheads for the year are budgeted to be $ 400,000 and are to be
recovered on the basis of the total of 80,000 direct labour hours for the year. Other
overhead, in selling, distribution and administration, a recovered at the rate of $ 100 per
job. What is the total cost of job 123.