Solve this question financial accounting King Company is a consulting firm. The firm expects to have $ 45,500 inindirect costs during the year and bill customers for 6,500 hours. The costof direct labor is $ 65 per hour.1. Calculate the predetermined overhead allocation rate for King.2. King completed a consulting job for Gavin Green and billed the customerfor 14 hours. What was the total cost of the consulting?3. If King wants to earn a profit equal to 70% of the cost of a job, how muchshould the company charge Mr. Green?

Step 1: Define Predetermined overhead ratePredetermined overhead rate is the rate that manufacturers…

Answered: King Company is a consulting firm. The…

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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Using ABM in a service company Haworth Company is a management consulting firm. The company expects to incur $167,500 of indirect costs this year. Indirect costs are allocated based on the following activities: Haworth bills clients at 120% of the direct labor costs. The company has estimated direct labor costs at $240 per hour. Last month, Haworth completed a consulting job for Client 76 and used the following resources: Determine the total cost of the consulting job and the operating income earned.
Suppose that you operate a business that produces widgets. What's a widget? A widget is a hypothetical product with no particular attributes or features to confuse us. Just widgets. In the course of a month, you produce 5,000 widgets. You only have three inputs when producing widgets; 1) factory space; 2) labor; and 3) raw materials. You pay rent of $3,000 per month. Your use of labor and raw materials depends on how many widgets you produce. When you produce 5,000 widgets, your labor costs are $4,000 and your raw material costs are $1,500. • What is your average cost (or average total cost) of producing 5,000 widgets? (Enter your answer without a dollars sign ($) in the following form: (i.e., dollars and cents) -'--
if the employees make 15$/hour what is the toral cost of trianing?
Simplex Company has the following estimated costs for next year: Direct materials $15,000 Direct labor $55,000 Sales commissions $75,000 Salary of production supervisor $35,000 Indirect materials $5,000 Advertising expense $11,000 Rent of factory equipment $16,000 Simplex estimates that 10,000 direct labor and 16,000 machine-hours will be worked during the year. If overhead in applied on the basis of machine hours, the overhead rate per hour will be:
Woody’s Widget Shop has the following information: The average widgethas a sales price of $18; raw materials for the widget are $4; it takes30 minutes to assemble one widget; and production labor is paid $8 perhour. Operating expenses are as follows: salaries, $2,500 per week; insurance,$1,200 per quarter; rent, $3,000 per month; and utilities, $1,000 per month.a. How many widgets must be sold each month in order to break even?b. How many dollars in sales does this represent?c. What is the contribution margin for each widget sold?d. If the goal is to make $100,000 profit per month, how many widgets mustbe sold?
The following information relates to labor for Bridgeport Appliance Repair Shop. Repair-technicians' wages Fringe benefits Overhead The desired profit margin per hour is $27. The material loading charge is 60% of invoice cost. Bridgeport estimates that 5,600 labor hours will be worked next year. If Bridgeport repairs a dishwasher that takes 1.6 hours to repair and uses parts that cost $80, compute the bill for the job. Total cost $140,000 39,200 61,600 $
Seal Financial Advisors provides accounting and finance assistance to customers in the retail business. Seal has four professionals on staff and an office with six clerical staff. Total compensation, including benefits, for the professional staff runs about $573,000 per year, and normal billable hours are 8,300 hours per year. The professional staff keep detailed time sheets organized by client number. The total office and administrative costs for the year are $755,000. Seal allocates office and administrative costs to clients monthly, using a predetermined overhead allocation rate based on billable hours. What is the predetermined overhead allocation rate that Seal will use for office and administrative costs? (Round your answer to the nearest cent.) A. $69.04 per hour B. $21.93 per hour C. $160.00 per hour D. $90.96 per hour
Wyckam Manufacturing Incorporated has provided the following estimates concerning its manufacturing costs: Cost per Machine- Hour $ 4.25 Direct materials Direct labor Supplies Utilities Depreciation Insurance Fixed Cost per Month $ 36,800 $ 1,400 $ 16,700 $ 12,700 For example, utilities should be $1,400 per month plus $0.05 per machine-hour. The company expects to work 5,000 machine-hours in June. Note that the company's direct labor is a fixed cost. Required: Prepare the company's planning budget for June. Wyckam Manufacturing Incorporated Planning Budget for Manufacturing Costs For the Month Ended June 30 Budgeted machine-hours Direct materials Direct labor Supplies Utilities Depreciation Insurance Total manufacturing cost $ 0.30 $ 0.05 $ $ 36,000 16,000 1,500 1,650 16,700 1,200 73,050
A company has been making wakeboards for many years. The monthly overhead is $19,000 and each wakeboard costs $363 in materials and labor to make. If these items are sold for $475. How many wakeboards must be sold to break even? What is the profit in dollars if 189 wakeboards are made and sold?
Mackenzie Consulting computes the cost of each consulting engagement by adding a portion of the firm wide overhead costs to the labor cost of the consultants on the engagement. The overhead costs are assigned to each consulting engagement using a cost driver rate based on consultant labor costs. Mackenzie Consulting’s overhead costs are $5 million per year, and total consultant labor cost is estimated at $2.5 million per year. Required (a) What is Mackenzie Consulting’s cost driver rate? (b) If the consultant labor cost on an engagement is $25,000, what cost will Mackenzie Consulting compute as the total cost of the consulting engagement?
Vinubhai

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