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 $ 14,000 Employee costs 1,015,000 Total administration 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 16 percent. Direct labor costs are expected to increase by 34 percent. Variable administration per billable hour is expected to remain the same, but fixed administration cost is expected to decrease by 13 percent. Questions: 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)? Determine the total costs per billable hour for QTR 1 and QTR 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 $ 14,000 Employee costs 1,015,000 Total administration 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 16 percent. Direct labor costs are expected to increase by 34 percent. Variable administration per billable hour is expected to remain the same, but fixed administration cost is expected to decrease by 13 percent. Questions: 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)? Determine the total costs per billable hour for QTR 1 and QTR 2.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
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 | $ 14,000 |
|---|---|
| Employee costs | 1,015,000 |
| Total administration | 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 16 percent. Direct labor costs are expected to increase by 34 percent. Variable administration per billable hour is expected to remain the same, but fixed administration cost is expected to decrease by 13 percent.
Questions:
- 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)?
- Determine the total costs per billable hour for QTR 1 and QTR 2.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
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