Tech Solutions is a consulting firm that uses a job-order costing system. Its direct materials consist of hardware and software that it purchases and installs on behalf of its clients. The firm's direct labor includes salaries of consultants that work at the client's job site, and its overhead consists of costs such as depreciation, utilities, and insurance related to the office headquarters as well as the office supplies that are consumed serving clients. Tech Solutions computes its predetermined overhead rate annually on the basis of direct labor-hours. At the beginning of the year, it estimated that 75,000 direct labor-hours would be required for the period's estimated level of client service. The company also estimated $712,500 of fixed overhead cost for the coming period and variable overhead of $0.50 per direct labor-hour. The firm's actual overhead cost for the year was $731,500 and its actual total direct labor was 80,650 hours. Required: 1. Compute the predetermined overhead rate. 2. During the year, Tech Solutions started and completed the Xavier Company engagement. The following information was available with respect to this job: Direct materials Direct labor cost Direct labor-hours worked Compute the total job cost for the Xavier Company engagement. $ 39,600 $ 28,200 310
Tech Solutions is a consulting firm that uses a job-order costing system. Its direct materials consist of hardware and software that it purchases and installs on behalf of its clients. The firm's direct labor includes salaries of consultants that work at the client's job site, and its overhead consists of costs such as depreciation, utilities, and insurance related to the office headquarters as well as the office supplies that are consumed serving clients. Tech Solutions computes its predetermined overhead rate annually on the basis of direct labor-hours. At the beginning of the year, it estimated that 75,000 direct labor-hours would be required for the period's estimated level of client service. The company also estimated $712,500 of fixed overhead cost for the coming period and variable overhead of $0.50 per direct labor-hour. The firm's actual overhead cost for the year was $731,500 and its actual total direct labor was 80,650 hours. Required: 1. Compute the predetermined overhead rate. 2. During the year, Tech Solutions started and completed the Xavier Company engagement. The following information was available with respect to this job: Direct materials Direct labor cost Direct labor-hours worked Compute the total job cost for the Xavier Company engagement. $ 39,600 $ 28,200 310
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Tech Solutions is a consulting firm that uses a job-order costing system. Its direct materials consist of hardware and software that it
purchases and installs on behalf of its clients. The firm's direct labor includes salaries of consultants that work at the client's job site,
and its overhead consists of costs such as depreciation, utilities, and insurance related to the office headquarters as well as the office
supplies that are consumed serving clients.
Tech Solutions computes its predetermined overhead rate annually on the basis of direct labor-hours. At the beginning of the year, it
estimated that 75,000 direct labor-hours would be required for the period's estimated level of client service. The company also
estimated $712,500 of fixed overhead cost for the coming period and variable overhead of $0.50 per direct labor-hour. The firm's
actual overhead cost for the year was $731,500 and its actual total direct labor was 80,650 hours.
Required:
1. Compute the predetermined overhead rate.
2. During the year, Tech Solutions started and completed the Xavier Company engagement. The following information was available
with respect to this job:
Direct materials
Direct labor cost.
Direct labor-hours worked
$ 39,600
$ 28,200
310
Compute the total job cost for the Xavier Company engagement.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Compute the predetermined overhead rate. (Round your answer to 2 decimal places.)
Predetermined overhead rate
per DLH
< Required 1
Required 2 >
Transcribed Image Text:Tech Solutions is a consulting firm that uses a job-order costing system. Its direct materials consist of hardware and software that it
purchases and installs on behalf of its clients. The firm's direct labor includes salaries of consultants that work at the client's job site,
and its overhead consists of costs such as depreciation, utilities, and insurance related to the office headquarters as well as the office
supplies that are consumed serving clients.
Tech Solutions computes its predetermined overhead rate annually on the basis of direct labor-hours. At the beginning of the year, it
estimated that 75,000 direct labor-hours would be required for the period's estimated level of client service. The company also
estimated $712,500 of fixed overhead cost for the coming period and variable overhead of $0.50 per direct labor-hour. The firm's
actual overhead cost for the year was $731,500 and its actual total direct labor was 80,650 hours.
Required:
1. Compute the predetermined overhead rate.
2. During the year, Tech Solutions started and completed the Xavier Company engagement. The following information was available
with respect to this job:
Direct materials
Direct labor cost.
Direct labor-hours worked
Compute the total job cost for the Xavier Company engagement.
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
Direct materials
Direct labor
$ 39,600
$ 28,200
310
Compute the total job cost for the Xavier Company engagement. (Round your intermediate calculations to 2 decimal places.)
Overhead applied
Total manufacturing cost
$
0
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