Records at Hal's Accounting Services show the following costs for year 1. Direct materials and supplies Employee costs Total overhead 40,000 2,900,000 1,300,000 $ Production was 25,000 billable hours. Fixed overhead was $700,000. Assuming no change in billable hours in year 2, direct materials and supplies costs are expected to increase by 10 percent. Direct labor costs are expected to increase by 5 percent. Variable overhead per billable hour is expected to remain the same, but fixed overhead is expected to increase by 5 percent. Required: a. Year 2 production is expected to be 20,000 billable hours. What are the estimated direct materials, direct labor, variable overhead, and fixed overhead costs for year 2? b. Determine the total costs per billable hour for year 1 and year 2.

Records at Hal's Accounting Services show the following costs for year 1. Direct materials and supplies Employee costs Total overhead 40,000 2,900,000 1,300,000 $ Production was 25,000 billable hours. Fixed overhead was $700,000. Assuming no change in billable hours in year 2, direct materials and supplies costs are expected to increase by 10 percent. Direct labor costs are expected to increase by 5 percent. Variable overhead per billable hour is expected to remain the same, but fixed overhead is expected to increase by 5 percent. Required: a. Year 2 production is expected to be 20,000 billable hours. What are the estimated direct materials, direct labor, variable overhead, and fixed overhead costs for year 2? b. Determine the total costs per billable hour for year 1 and year 2.

Name: Records at Hal's Accounting Services show the following costs for yea
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Description: Records at Hal's Accounting Services show the following costs for year 1.Direct materials and suppliesEmployee costsTotal overhead$40,0002,900,0001,300,000Production was 25,000 billable hours. Fixed overhead was $700,000.Assuming no change in billab

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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