An advertising agency uses a jobs costing system to calculate the cost of client contracts. Contract A42 is one of several contracts undertaken in the last accounting period. Costs associated with the contract consist of :
Direct materials $5 500
Direct expenses $14 500
Design staff worked 1020 hours on contract A42, of which 120 hours were overtime. One third of these overtime hours were worked at the request of the client who wanted the contract to be completed quickly. Overtime is paid at a premium of 25% of the basic wage of $24.00 per hour. The prime cost of contract A42 is
A $41 600 B $44 480 C $44 720 D $45 200
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