Exercise 2-29 (Static) Pricing services using job order costing LO A1Hansel Company has requested bids from several architects to design its new corporate headquarters. Frey Architects is bidding onthe job. Frey estimates that the job will require the following direct labor.Direct LaborArchitectsStaffClericalEstimatedHours150300500Required 1Frey applies overhead to jobs at 175% of direct labor cost. Frey wants to earn at least $80,000 profit on the architectural job. Based onpast experience and market research, it estimates that the competition will bid between $285,000 and $350,000 for the job.HourlyRate1. What is Frey's estimated cost of the architectural job?2. If Frey bids a price of $285,000, what is its expected profit? Will it earn its target profit of $80,000?3. What bid price would earn the desired $80,000 target profit?Direct labor$ 3007520Complete this question by entering your answers in the tabs below.Required 2 Required 3What is Frey's estimated cost of the architectural job?Total estimated labor costOverheadEstimated Applied OverheadTotal estimated costEstimated CostEstimated hours Hourly rateOH baseLabor costOH rate< Required 1Total costRequired 2 >

It is a system of allocating costs to groups of unique products. It applies to the production of…

Hansel Company has requested bids from several architects to design its new corporate headquarters. Frey Architects is bidding on the job. Frey estimates that the job will require the following direct labor. Direct Labor Architects Staff Clerical Estimated Hours 150 300 500 Hourly Rate $ 300 75 20 Frey applies overhead to jobs at 175% of direct labor cost. Frey wants to earn at least $80,000 profit on the architectural job. Based on past experience and market research, it estimates that the competition will bid between $285,000 and $350,000 for the job. 1. What is Frey's estimated cost of the architectural job? 2. If Frey bids a price of $285,000, what is its expected profit? Will it earn its target profit of $80,000? 3. What bid price would earn the desired $80,000 target profit?

Hansel Company has requested bids from several architects to design its new corporate headquarters. Frey Architects is bidding on the job. Frey estimates that the job will require the following direct labor. Direct Labor Architects Staff Clerical Estimated Hours 150 300 500 Hourly Rate $ 300 75 20 Frey applies overhead to jobs at 175% of direct labor cost. Frey wants to earn at least $80,000 profit on the architectural job. Based on past experience and market research, it estimates that the competition will bid between $285,000 and $350,000 for the job. 1. What is Frey's estimated cost of the architectural job? 2. If Frey bids a price of $285,000, what is its expected profit? Will it earn its target profit of $80,000? 3. What bid price would earn the desired $80,000 target profit?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Concept explainers

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.

Question

Exercise 2-29 (Static) Pricing services using job order costing LO A1
Hansel Company has requested bids from several architects to design its new corporate headquarters. Frey Architects is bidding on
the job. Frey estimates that the job will require the following direct labor.
Direct Labor
Architects
Staff
Clerical
Estimated
Hours
150
300
500
Required 1
Frey applies overhead to jobs at 175% of direct labor cost. Frey wants to earn at least $80,000 profit on the architectural job. Based on
past experience and market research, it estimates that the competition will bid between $285,000 and $350,000 for the job.
Hourly
Rate
1. What is Frey's estimated cost of the architectural job?
2. If Frey bids a price of $285,000, what is its expected profit? Will it earn its target profit of $80,000?
3. What bid price would earn the desired $80,000 target profit?
Direct labor
$ 300
75
20
Complete this question by entering your answers in the tabs below.
Required 2 Required 3
What is Frey's estimated cost of the architectural job?
Total estimated labor cost
Overhead
Estimated Applied Overhead
Total estimated cost
Estimated Cost
Estimated hours Hourly rate
OH base
Labor cost
OH rate
< Required 1
Total cost
Required 2 >

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