Crow Design, Inc. is a Web site design and consulting firm. The firm uses a job order costing system in which each client is a different job. Crow Design assigns direct labor, licensing costs, and travel costs directly to each job. It allocates indirect costs to jobs based on a predetermined overhead allocation rate, computed as a percentage of direct labor costs. Requirements Compute Crow Design's direct labor rate and its predetermined overhead. allocation rate for 2024. 1. 2. Compute the total cost of each job. 3. If Ginger wants to earn profits equal to 25% of service revenue, what fee. should she charge each of these two clients? 4. Why does Crow Design assign costs to jobs? Data table Direct labor hours Software licensing costs Travel costs $ Tasty Coop 900 hours Root Chocolates 100 hours 100 0 4,000 $ 8,000 - - X X At the beginning of 2024, managing partner Erica Ginger prepared the following budget estimates: (Click the icon to view the prepared budget.) In November 2024, Crow Design served several clients. Records for two clients appear here- (Click the icon to view the records for two clients.) Data table Direct labor hours (professionals) Direct labor costs (professionals) Support staff salaries. Computer leases Office supplies Office rent Print 8,000 hours $ 2,000,000 662,000 47,000 28,000 63,000 Done - X
Crow Design, Inc. is a Web site design and consulting firm. The firm uses a job order costing system in which each client is a different job. Crow Design assigns direct labor, licensing costs, and travel costs directly to each job. It allocates indirect costs to jobs based on a predetermined overhead allocation rate, computed as a percentage of direct labor costs. Requirements Compute Crow Design's direct labor rate and its predetermined overhead. allocation rate for 2024. 1. 2. Compute the total cost of each job. 3. If Ginger wants to earn profits equal to 25% of service revenue, what fee. should she charge each of these two clients? 4. Why does Crow Design assign costs to jobs? Data table Direct labor hours Software licensing costs Travel costs $ Tasty Coop 900 hours Root Chocolates 100 hours 100 0 4,000 $ 8,000 - - X X At the beginning of 2024, managing partner Erica Ginger prepared the following budget estimates: (Click the icon to view the prepared budget.) In November 2024, Crow Design served several clients. Records for two clients appear here- (Click the icon to view the records for two clients.) Data table Direct labor hours (professionals) Direct labor costs (professionals) Support staff salaries. Computer leases Office supplies Office rent Print 8,000 hours $ 2,000,000 662,000 47,000 28,000 63,000 Done - X
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Topic Video
Question
Transcribed Image Text:Crow Design, Inc. is a Web site design and consulting firm. The firm uses a job order costing system in
which each client is a different job. Crow Design assigns direct labor, licensing costs, and travel costs
directly to each job. It allocates indirect costs to jobs based on a predetermined overhead allocation rate,
computed as a percentage of direct labor costs.
Requirements
Compute Crow Design's direct labor rate and its predetermined overhead
allocation rate for 2024.
1.
2.
Compute the total cost of each job.
3.
If Ginger wants to earn profits equal to 25% of service revenue, what fee
should she charge each of these two clients?
4.
Why does Crow Design assign costs to jobs?
Data table
Direct labor hours
Software licensing costs
Travel costs
$
Tasty Coop
900 hours
Root Chocolates
100 hours
100
0
4,000 $
8,000
-X
- X
At the beginning of 2024, managing partner Erica Ginger prepared the following budget
estimates:
(Click the icon to view the prepared budget.)
In November 2024, Crow Design served several clients. Records for two clients appear here:
(Click the icon to view the records for two clients.)
Data table
Direct labor hours (professionals)
Direct labor costs (professionals)
Support staff salaries
Computer leases
Office supplies
Office rent
Print
8,000 hours
$ 2,000,000
662,000
47.000
28,000
63,000
Done
- X
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