Exercise 5-33 (Algo) Methods of Estimating Costs: Account Analysis (LO 5-1, 2)Hughes Payroll and Clerical Services (HPCS) provides payroll, bookkeeping, and other services to small businesses. HPCS financialrecords show the following costs for last quarter (QTR 1):$ 14,0001,015,000455,000HPCS recorded 4,375 billable hours in QTR 1 and fixed administrative cost was $245,000.Assuming no change in billable hours in the next quarter (QTR 2), supplies costs are expected to increase by 19 percent. Direct laborcosts are expected to increase by 40 percent. Variable administration per billable hour is expected to remain the same, but fixedadministration cost is expected to decrease by 16 percent.SuppliesEmployee costsTotal administrationRequired:a. HPCS expects to bill 5,250 hours next quarter. What are the estimated direct materials, direct labor, variable overhead, and fixedoverhead costs for next quarter (QTR 2)?b. Determine the total costs per billable hour for QTR 1 and QTR 2.Complete this question by entering your answers in the tabs below.Required ARequired BHPCS expects to bill 5,250 hours next quarter. What are the estimated direct materials, direct labor, variable overhead, andfixed overhead costs for next quarter (QTR 2)?Note: Do not round intermediate calculations. Round your final answers to whole dollar.Cost ItemDirect materialsDirect laborVariable overheadFixed overheadTotal costsNext QuarterCost$Required ARequired B >

Variable costs are costs that vary with the change in the level of output whereas fixed costs are…

Exercise 5-33 (Algo) Methods of Estimating Costs: Account Analysis (LO 5-1, 2) Hughes Payroll and Clerical Services (HPCS) provides payroll, bookkeeping, and other services to small businesses. HPCS financial records show the following costs for last quarter (QTR 1): Supplies Employee costs $ 14,000 1,015,000 455,000 Total administration HPCS recorded 4,375 billable hours in QTR 1 and fixed administrative cost was $245,000. Assuming no change in billable hours in the next quarter (QTR 2). supplies costs are expected to increase by 19 percent. Direct labor costs are expected to increase by 40 percent. Variable administration per billable hour is expected to remain the same, but fixed administration cost is expected to decrease by 16 percent. Required: a. HPCS expects to bill 5,250 hours next quarter. What are the estimated direct materials, direct labor, variable overhead, and fixed overhead costs for next quarter (QTR 2)? b. Determine the total costs per billable hour for QTR 1 and QTR 2.

Exercise 5-33 (Algo) Methods of Estimating Costs: Account Analysis (LO 5-1, 2) Hughes Payroll and Clerical Services (HPCS) provides payroll, bookkeeping, and other services to small businesses. HPCS financial records show the following costs for last quarter (QTR 1): Supplies Employee costs $ 14,000 1,015,000 455,000 Total administration HPCS recorded 4,375 billable hours in QTR 1 and fixed administrative cost was $245,000. Assuming no change in billable hours in the next quarter (QTR 2). supplies costs are expected to increase by 19 percent. Direct labor costs are expected to increase by 40 percent. Variable administration per billable hour is expected to remain the same, but fixed administration cost is expected to decrease by 16 percent. Required: a. HPCS expects to bill 5,250 hours next quarter. What are the estimated direct materials, direct labor, variable overhead, and fixed overhead costs for next quarter (QTR 2)? b. Determine the total costs per billable hour for QTR 1 and QTR 2.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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