The Meyers CPA firm has the following overhead budget for the year: Overhead Indirect materials Indirect labor Depreciation-Building Depreciation-Furniture Utilities Insurance Property taxes Other expenses Total $ 500,000 1,900,000 333,000 65,000 385,000 54,000 68,000 175,000 $ 3,480,000 The firm estimates total direct labor cost for the year to be $2,175,000. The firm uses direct labor cost as the cost driver to apply overhead to clients. During January, the firm worked for many clients; data for two of them follow: Gargus account Direct labor Feller account Direct labor $ 4,500 $ 10,500 Required: 1. Compute the firm's predetermined overhead rate. 2. Compute the amount of overhead to be charged to the Gargus and Feller accounts using the predetermined overhead rate calculated in requirement 1. 3. Compute total job cost for the Gargus account and the Feller account.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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The Meyers CPA firm has the following overhead budget for the year:
Overhead
Indirect materials
Indirect labor
Depreciation-Building
Depreciation-Furniture
Utilities
Insurance
Property taxes
Other expenses
Total
$ 500,000
1,900,000
333,000
65,000
385,000
54,000
68,000
175,000
$ 3,480,000
The firm estimates total direct labor cost for the year to be $2,175,000. The firm uses direct labor cost as the cost driver to apply
overhead to clients.
During January, the firm worked for many clients; data for two of them follow:
Gargus account
Direct labor
$ 4,500
Feller account
Direct labor $ 10,500
Required:
1. Compute the firm's predetermined overhead rate.
2. Compute the amount of overhead to be charged to the Gargus and Feller accounts using the predetermined overhead rate
calculated in requirement 1.
3. Compute total job cost for the Gargus account and the Feller account.
Transcribed Image Text:The Meyers CPA firm has the following overhead budget for the year: Overhead Indirect materials Indirect labor Depreciation-Building Depreciation-Furniture Utilities Insurance Property taxes Other expenses Total $ 500,000 1,900,000 333,000 65,000 385,000 54,000 68,000 175,000 $ 3,480,000 The firm estimates total direct labor cost for the year to be $2,175,000. The firm uses direct labor cost as the cost driver to apply overhead to clients. During January, the firm worked for many clients; data for two of them follow: Gargus account Direct labor $ 4,500 Feller account Direct labor $ 10,500 Required: 1. Compute the firm's predetermined overhead rate. 2. Compute the amount of overhead to be charged to the Gargus and Feller accounts using the predetermined overhead rate calculated in requirement 1. 3. Compute total job cost for the Gargus account and the Feller account.
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