Midterm 1 - What is the deal?" is a company in West Windsor, NJ operated by Pam Smith. The company has two activities. Here are the facts: A. Subscriptions: The company provides maintenance of the equipment including back-ups and charges $50 weekly. B. Technical repairs: These repair services are priced $100 per hour plus materials. The materials are charged 20% over the purchase price and the employees are paid $30 per hour. The overhead for 2024 was estimated to be $20,000, and the estimated hours of labor 2,000. The company allocates the costs based on the number of hours of labor. Durante the first week of January they sold 10 subscriptions and received four computers to be repaired. The maintenance required 1 hour each. The information about orders is attached: Materials Labor cost Order 01 $120 $60 Order 02 $200 $120 Order 03 $100 $60 1. Determine the total cost of serving each client. 2. Calculate the profitability of each order and the profitability of the subscriptions. Order 04 $50 $30

Midterm 1 - What is the deal?" is a company in West Windsor, NJ operated by Pam Smith. The company has two activities. Here are the facts: A. Subscriptions: The company provides maintenance of the equipment including back-ups and charges $50 weekly. B. Technical repairs: These repair services are priced $100 per hour plus materials. The materials are charged 20% over the purchase price and the employees are paid $30 per hour. The overhead for 2024 was estimated to be $20,000, and the estimated hours of labor 2,000. The company allocates the costs based on the number of hours of labor. Durante the first week of January they sold 10 subscriptions and received four computers to be repaired. The maintenance required 1 hour each. The information about orders is attached: Materials Labor cost Order 01 $120 $60 Order 02 $200 $120 Order 03 $100 $60 1. Determine the total cost of serving each client. 2. Calculate the profitability of each order and the profitability of the subscriptions. Order 04 $50 $30

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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Question

Midterm 1- What is the deal?" is a company in West Windsor, NJ operated by Pam Smith. The company
has two activities. Here are the facts:
A. Subscriptions:
The company provides maintenance of the equipment including back-ups and charges $50 weekly.
B. Technical repairs:
These repair services are priced $100 per hour plus materials. The materials are charged 20% over the
purchase price and the employees are paid $30 per hour. The overhead for 2024 was estimated to be
$20,000, and the estimated hours of labor 2,000. The company allocates the costs based on the number
of hours of labor.
Durante the first week of January they sold 10 subscriptions and received four computers to be
repaired. The maintenance required 1 each. The information about orders is attached:
Materials
Labor cost
Order 01
$120
$60
Order 02
$200
$120
Order 03
$100
$60
1. Determine the total cost of serving each client.
2. Calculate the profitability of each order and the profitability of the subscriptions.
Order 04
$50
$30

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