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ustomizes a program for each client based on their individual goals that includes diet recommendations (prepackaged food and upplements), nutrition counseling, and guided fitness (personal training). The company uses a modified job order cost system tha eeps track of the cost of the food, vitamins, and nutritional supplements the company provides to each client, as well as the amo time nutrition and fitness consultants spend with each client. Optimum applies all indirect operating costs (e.g., rent, utilities, an anagement salaries) as a percentage of the consultant's labor cost. uring the most recent year, the firm estimated that it would pay $220,000 to its consultants and incur indirect operating costs off 330,000. Actual consultant labor costs were $235,000 and actual indirect operating costs were $320,000. The cost records for Optimum's clients are summarized below: Food and nutritional supplements Nutritional counseling ($17 per hour) Judy $ 400 170 Tom $ 1,200 340 Elizabeth $ 200 204

ustomizes a program for each client based on their individual goals that includes diet recommendations (prepackaged food and upplements), nutrition counseling, and guided fitness (personal training). The company uses a modified job order cost system tha eeps track of the cost of the food, vitamins, and nutritional supplements the company provides to each client, as well as the amo time nutrition and fitness consultants spend with each client. Optimum applies all indirect operating costs (e.g., rent, utilities, an anagement salaries) as a percentage of the consultant's labor cost. uring the most recent year, the firm estimated that it would pay $220,000 to its consultants and incur indirect operating costs off 330,000. Actual consultant labor costs were $235,000 and actual indirect operating costs were $320,000. The cost records for Optimum's clients are summarized below: Food and nutritional supplements Nutritional counseling ($17 per hour) Judy $ 400 170 Tom $ 1,200 340 Elizabeth $ 200 204

FINANCIAL ACCOUNTING
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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vaibhav

subject-Accounting

Optimum Health Incorporated provides diet, fitness, and nutrition services to clients who want a healthier lifestyle. The company customizes a program for each client based on their individual goals that includes diet recommendations (prepackaged food and supplements), nutrition counseling, and guided fitness (personal training). The company uses a modified job order cost system that keeps track of the cost of the food, vitamins, and nutritional supplements the company provides to each client, as well as the amount of time nutrition and fitness consultants spend with each client. Optimum applies all indirect operating costs (e.g., rent, utilities, and management salaries) as a percentage of the consultant's labor cost. During the most recent year, the firm estimated that it would pay $220,000 to its consultants and incur indirect operating costs of $330,000. Actual consultant labor costs were $235,000 and actual indirect operating costs were $320,000. The cost records for thre of Optimum's clients are summarized below: Food and nutritional supplements Nutritional counseling ($17 per hour) Personal fitness training ($22 per hour) Indirect operating costs Judy rofitability $ 400 Complete this question by entering your answers in the tabs below. Elizabeth 170 440 < Required 2 Required: 1. Compute the predetermined overhead rate. 2. Determine the total cost of serving each client. 3. Assume the company charges clients an up-front fee of $420. Food and nutritional supplements are priced at 20 percent above cost. Clients are charged $46 per hour for consulting services (both nutrition counseling and personal training). Determine the profitability of each client. Tom $ 1,200 340 660 Required 1 Required 2 Required 3 Assume the company charges clients an up-front fee of $420. Food and nutritional supplements are priced at 20 percent above cost. Clients are charged $46 per hour for consulting services (both nutrition counseling and personal training).. Determine the profitability of each client. Judy Tom ? Requited Elizabeth $ 200 204 880
Transcribed Image Text:Optimum Health Incorporated provides diet, fitness, and nutrition services to clients who want a healthier lifestyle. The company customizes a program for each client based on their individual goals that includes diet recommendations (prepackaged food and supplements), nutrition counseling, and guided fitness (personal training). The company uses a modified job order cost system that keeps track of the cost of the food, vitamins, and nutritional supplements the company provides to each client, as well as the amount of time nutrition and fitness consultants spend with each client. Optimum applies all indirect operating costs (e.g., rent, utilities, and management salaries) as a percentage of the consultant's labor cost. During the most recent year, the firm estimated that it would pay $220,000 to its consultants and incur indirect operating costs of $330,000. Actual consultant labor costs were $235,000 and actual indirect operating costs were $320,000. The cost records for thre of Optimum's clients are summarized below: Food and nutritional supplements Nutritional counseling ($17 per hour) Personal fitness training ($22 per hour) Indirect operating costs Judy rofitability $ 400 Complete this question by entering your answers in the tabs below. Elizabeth 170 440 < Required 2 Required: 1. Compute the predetermined overhead rate. 2. Determine the total cost of serving each client. 3. Assume the company charges clients an up-front fee of $420. Food and nutritional supplements are priced at 20 percent above cost. Clients are charged $46 per hour for consulting services (both nutrition counseling and personal training). Determine the profitability of each client. Tom $ 1,200 340 660 Required 1 Required 2 Required 3 Assume the company charges clients an up-front fee of $420. Food and nutritional supplements are priced at 20 percent above cost. Clients are charged $46 per hour for consulting services (both nutrition counseling and personal training).. Determine the profitability of each client. Judy Tom ? Requited Elizabeth $ 200 204 880
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