Diaz and Associates incurred the following direct labor costs in completing tax services job for a client. Diaz applies overhead at 50 of direct labor cost. Direct Labor on Tax Job Partner Senior manager Staff accountants Direct labor type Hours Used Total direct labor cost Overhead Estimated Applied Overhead Total cost 5 14 90 1. Determine the total cost of this tax services job. Estimated Cost Hourly Rate $ 550 210 70 Hours used Hourly rate OH Base Labor Cost OH rate Total Cost 2. If Diaz charged $23,000 for this tax services job, what is the gross profit for the job? Gross Profit

Diaz and Associates incurred the following direct labor costs in completing tax services job for a client. Diaz applies overhead at 50 of direct labor cost. Direct Labor on Tax Job Partner Senior manager Staff accountants Direct labor type Hours Used Total direct labor cost Overhead Estimated Applied Overhead Total cost 5 14 90 1. Determine the total cost of this tax services job. Estimated Cost Hourly Rate $ 550 210 70 Hours used Hourly rate OH Base Labor Cost OH rate Total Cost 2. If Diaz charged $23,000 for this tax services job, what is the gross profit for the job? Gross Profit

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.

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Diaz and Associates incurred the following direct labor costs in completing tax services job for a client. Diaz applies overhead at 50% of direct labor cost. (Please see picture for rest of info).

Definition Definition Indirect costs incurred while producing goods or services. Overhead costs cannot be directly attributed to products or services. Overhead includes indirect material cost, indirect labor cost, rent, utilities expenses, and depreciation. Since these costs directly affect the profitability of a company, managing overhead becomes an important task for management.

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