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 67,500 direct labor-hours would be required for the period's estimated level of client service. The company also estimated $540,000 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 $557,400 and its actual total direct labor was 75,000 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. $ 41,850 $ 24,300 270
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 67,500 direct labor-hours would be required for the period's estimated level of client service. The company also estimated $540,000 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 $557,400 and its actual total direct labor was 75,000 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. $ 41,850 $ 24,300 270
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Please do not give solution in image format thanku
![Exercise 2-6 (Algo) Job-Order Costing for a Service Company [LO2-1, LO2-
2, LO2-3]
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 67,500 direct labor-hours would be required
for the period's estimated level of client service. The company also estimated $540,000 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 $557,400 and its actual total direct labor was 75,000
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:
$ 41,850
$ 24,300
270
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.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe9f99bc1-b177-45e1-a6f4-6be690697c34%2Fb326a671-b37e-447e-9b95-655abc05e7d2%2Fltwuowh_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Exercise 2-6 (Algo) Job-Order Costing for a Service Company [LO2-1, LO2-
2, LO2-3]
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 67,500 direct labor-hours would be required
for the period's estimated level of client service. The company also estimated $540,000 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 $557,400 and its actual total direct labor was 75,000
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:
$ 41,850
$ 24,300
270
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.
Transcribed Image Text: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 laber cont
Direct labor-hours worked
Compute the total job cost for the Xavier Company engagement
5 41,950
$ 24,330
270
Complete this question by entering your answers in the tabs below.
Required 2
Compute the predetermined overhead rate. (Round your answer to 2 decimal places)
Pradeemned cathoadrals
Required:
1. Compute the predetermined overhead rate
2. During the year Tech Solutions started and completed the Xavier Compeny engagement. The
following information was available with respect to this job
Direct materiale
Direct laborecet
Direct labor-hours worked
Compute the total job cost for the Xavier Company engagement
$41,450
$24,300
210
Required 2 >
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Compute the total job cast for the Xavier Company engagement. (Round your intermediate calculation
Direct raterials
Direct labor
Overheed applied
Total manufacturing co
< Required 1
Required 2
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