Jace and Associates provides professional consulting services to a variety of clientele in an effort to help them improve the operatingeffectiveness and profitability of their businesses. At the start of the year, budgeted MOH costs were $250,000; budgeted direct laborhours, its allocation base, were 100,000. The company is considering doing work for a new client that is estimated to take around 45hours.How much should Jace bid on this job if the company incurs a direct labor rate of $30/hour and charges a 60% mark-up above jobcosts? (Round answer to 2 decimal places, e.g. 5,275.25.)Bid price$

The manufacturing overhead should be absorbed by applying the budgeted rate to actually used direct labor hours. Absorbed MOH = (Budgeted MOH costs/Budgeted direct labor hours) * Actual direct labor hours.Budgeted MOH costs $250,000 Budgeted direct labor hours 100,000 Actual direct labor hours 45 Substitute the values in the formula. Absorbed MOH ($250,000/100,000) * 45 = $112.5 per direct labor hourDirect labor (45 hours * $30) $1,350 Absorbed MOH $112.50 Total cost $1,462.50 Add: 60% Mark-up $1,462.50 * 60% = $877.50 Bid price $2,340.00Hence, the bid price should be "$2,340.00".

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Jace and Associates provides professional consulting services to a variety of clientele in an effort to help them improve the operating effectiveness and profitability of their businesses. At the start of the year, budgeted MOH costs were $250,000; budgeted direct labo hours, its allocation base, were 100,000. The company is considering doing work for a new client that is estimated to take around 45 hours. How much should Jace bid on this job if the company incurs a direct labor rate of $30/hour and charges a 60% mark-up above job costs? (Round answer to 2 decimal places, e.g. 5,275.25.) Bid price $

Jace and Associates provides professional consulting services to a variety of clientele in an effort to help them improve the operating effectiveness and profitability of their businesses. At the start of the year, budgeted MOH costs were $250,000; budgeted direct labo hours, its allocation base, were 100,000. The company is considering doing work for a new client that is estimated to take around 45 hours. How much should Jace bid on this job if the company incurs a direct labor rate of $30/hour and charges a 60% mark-up above job costs? (Round answer to 2 decimal places, e.g. 5,275.25.) Bid price $

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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