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 Complete this question by entering your answers in the tabs below. Required A Required B 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)? Note: Do not round intermediate calculations. Round your final answers to whole dollar. Cost Item Direct materials Direct labor Variable overhead Fixed overhead Total costs Next Quarter Cost $ 0 < Required A Required B >
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 Complete this question by entering your answers in the tabs below. Required A Required B 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)? Note: Do not round intermediate calculations. Round your final answers to whole dollar. Cost Item Direct materials Direct labor Variable overhead Fixed overhead Total costs Next Quarter Cost $ 0 < Required A Required B >
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Dog
Transcribed Image Text: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):
$ 14,000
1,015,000
455,000
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.
Supplies
Employee costs
Total administration
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.
Complete this question by entering your answers in the tabs below.
Required A
Required B
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)?
Note: Do not round intermediate calculations. Round your final answers to whole dollar.
Cost Item
Direct materials
Direct labor
Variable overhead
Fixed overhead
Total costs
Next Quarter
Cost
$
Required A
Required B >
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education