The Underhill plant has two categories of overhead: maintenance and inspection. Costs expected for these categories for the coming year are as follows: The plant currently applies overhead using direct labour hours and expected capacity of 70,000 direct labour hours. The following data has been assembled for use in developing a bid for a proposed job:
Total expected machine hours for all jobs during the year are 25,000, and the total expected number of inspections is 1,900. Using direct labour hours to assign overhead, the total cost of the potential job would be
Definitions:
Output Supply
The total amount of a product or service that is available for purchase at any given price level in a given market.
Long-Run Cost Function
A concept that describes how the total production costs of a firm change based on output levels, considering all inputs as variable in the long term.
Output Supply
The total amount of a good or service that producers are willing and able to sell at a given price over a certain period of time.
Price
The financial expenditure needed to acquire a good or service.
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