A local engineering firm is bidding on a design project for a new client. The total budgeted direct-labor costs for the firm are $400,000. The total budgeted indirect costs are $600,000. It is estimated that there are 8,000 billable hours in total. Required: What is the budgeted direct-labor cost rate? What is the budgeted indirect-cost rate assuming direct-labor cost is the allocation base? What should be the engineering firm bid on the project if the direct labor hours are estimated at 300 hours?
A local engineering firm is bidding on a design project for a new client. The total budgeted direct-labor costs for the firm are $400,000. The total budgeted indirect costs are $600,000. It is estimated that there are 8,000 billable hours in total. Required: What is the budgeted direct-labor cost rate? What is the budgeted indirect-cost rate assuming direct-labor cost is the allocation base? What should be the engineering firm bid on the project if the direct labor hours are estimated at 300 hours?
Essentials of Business Analytics (MindTap Course List)
2nd Edition
ISBN:9781305627734
Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Chapter15: Decision Analysis
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A local engineering firm is bidding on a design project for a new client. The total budgeted direct-labor costs for the firm are $400,000. The total budgeted indirect costs are $600,000. It is estimated that there are 8,000 billable hours in total.
Required:
- What is the budgeted direct-labor cost rate?
- What is the budgeted indirect-cost rate assuming direct-labor cost is the allocation base?
- What should be the engineering firm bid on the project if the direct labor hours are estimated at 300 hours?
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