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 164 328 675 Hourly Rate $ 300 75 20 Frey applies overhead to jobs at 175% of direct labor cost. Frey wants to earn at least $60,000 profit on the architectural job. Based of past experience and market research, it estimates that the competition will bid between $292,000 and $364,000 for the job. 1. What is Frey's estimated cost of the architectural job? 2. If Frey bids a price of $292,000, what is its expected profit? Will it earn its target profit of $60,000? 3. What bid price would earn the desired $60,000 target profit?

FINANCIAL ACCOUNTING
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Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Please answer all three questions in picture. Hansel Company...

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
164
328
675
Required 1
Frey applies overhead to jobs at 175% of direct labor cost. Frey wants to earn at least $60,000 profit on the architectural job. Based on
past experience and market research, it estimates that the competition will bid between $292,000 and $364,000 for the job.
Hourly
Rate
1. What is Frey's estimated cost of the architectural job?
2. If Frey bids a price of $292,000, what is its expected profit? Will it earn its target profit of $60,000?
3. What bid price would earn the desired $60,000 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 >
Transcribed Image Text: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 164 328 675 Required 1 Frey applies overhead to jobs at 175% of direct labor cost. Frey wants to earn at least $60,000 profit on the architectural job. Based on past experience and market research, it estimates that the competition will bid between $292,000 and $364,000 for the job. Hourly Rate 1. What is Frey's estimated cost of the architectural job? 2. If Frey bids a price of $292,000, what is its expected profit? Will it earn its target profit of $60,000? 3. What bid price would earn the desired $60,000 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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