Question

Simon Company manufactures furniture as per customer specifications. Simon has decided to price its jobs at the cost of direct materials and direct labor plus 28%. The job for an accounting firm included the following costs:

Direct materials	$35,000
Direct labor	4,000

Calculate the price charged by Simon Company to the accounting firm.

a.$44,800

b.$41,920

c.$48,920

d.$49,92

Answer 1

D. $49920.

Explanation :

Simon wants to price its job at the cost of direct material +labour +28%.

So it is 35000+4000+28%

=39000+28%

=49920.