Rutland Business Services (RBS) provides miscellaneous consulting and services to local businesses. In August, RBS workedfor three clients. It worked 270 hours for Selden Contracting, 170 hours for Moenhart Insurance, and 230 hours for EnglewoodMedical Center. RBS bills clients at $524 an hour; its labor costs are $133 an hour. A total of 750 hours were worked in Augustwith 80 hours not billable to clients. Overhead costs of $66,000 were incurred and were assigned to clients on the basis ofdirect labor-hours. Because 80 hours were not billable, some overhead was not assigned to jobs. RBS had $58,600 inmarketing and administrative costs. All transactions were on account.Required:a. What are the revenue and cost per client?b. Prepare an income statement for August.Complete this question by entering your answers in the tabs below.Required A Required BWhat are the revenue and cost per client?RevenueLaborOverheadMarginSeldenContracting$MoenhartInsurance0 $EnglewoodMedical Center0 $<Required A0Required B >

Revenue: Revenue, often referred to as sales or income, is the total amount of money earned by a…

Answered: Rutland Business Services (RBS)…

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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Heidt Cleaning Services (HCS) is a local custodial service company serving both the residential and commercial markets. The owner is considering dropping the commercial clients because that business seems only marginally profitable. Twenty-five employees worked a total of 45,300 hours last year, 30,200 on commercial jobs and 15,100 on residential jobs. Wages were $20 per hour for all work done. Any materials used are included in overhead as supplies. All overhead is allocated on the basis of labor-hours worked, which is also the basis for customer charges. Given current economic conditions and competition, HCS bills residential clients $40 per hour and commercial clients $30 per hour. Required: If overhead for the year was $404,580, what were the profits of the residential and commercial services using labor-hours as the allocation base? Note: Do not round intermediate calculations. Round final answers to the nearest whole dollar. Overhead consists of costs of supervision,…
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Rutland Business Services (RBS) provides miscellaneous consulting and services to local businesses. In August, RBS worked for three clients. It worked 270 hours for Selden Contracting, 170 hours for Moenhart Insurance, and 230 hours for Englewood Medical Center. RBS bills clients at $545 an hour; its labor costs are $140 an hour. A total of 750 hours were worked in August with 80 hours not billable to clients. Overhead costs of $71,250 were incurred and were assigned to clients on the basis of direct labor-hours. Because 80 hours were not billable, some overhead was not assigned to jobs. RBS had $60,000 in marketing and administrative costs. All transactions were on account. Required:What are the revenue and cost per client? Prepare an income statement for August.
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Dream Makers is a small manufacturer of gold and platinum jewelry. It uses a job costing system that applies overhead on the basis of direct labor hours. Budgeted factory overhead for the year was $465,800, and management budgeted 34,000 direct labor-hours. The company had no Materials, Work-in-Process, or Finished Goods Inventory at the beginning of April. These transactions were recorded during April: April insurance cost for the manufacturing property and equipment was $1,850. The premium had been paid in January. Recorded $1,060 depreciation on an administrative asset. Purchased 21 pounds of high-grade polishing materials at $16 per pound (indirect materials). Paid factory utility bill, $6,550, in cash. Incurred 4,000 hours and paid payroll costs of $160,000. Of this amount, 1,000 hours and $20,000 were indirect labor costs. Incurred and paid other factory overhead costs, $6,300. Purchased $25,000 of materials. Direct materials included unpolished semiprecious stones and gold.…
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A company employees two consultants who each have a different specialization. Caitlin specializes in industrial commercial construction and Zachary specializes in residential construction. The company expects to incur total overhead costs of $573,540 during the year and applies overhead based on annual salary costs. Caitlin's annual salary is $168,300, and she is expected to bill 2,400 hours during the year. Zachary's annual salary is $92,400, and he is expected to bill 2,200 hours during the year. Required: a. Calculate the predetermined overhead rate. b. Assuming that the hourly billing rate should be set to cover the total cost of services plus a 25% markup, compute the hourly billing rates for Caitlin and Zachary Complete this question by entering your answers in the tabs below. Required A Required B Calculate the predetermined overhead rate. Predetermined overhead rate %
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