accounting hmwk Compute Design’s predetermined indirect cost allocation rate for 2011.
Ace your studies with our custom writing services! We've got your back for top grades and timely submissions, so you can say goodbye to the stress. Trust us to get you there!
Order a Similar Paper Order a Different Paper
| Design, Inc., is a web site design and consulting firm. The firm uses a job order costing | ||||||||||
| system, in which each client is a different job. Widget Design traces direct labor, licensing costs, | ||||||||||
| and travel costs directly to each job. It allocates indirect costs to jobs based on a predetermined | ||||||||||
| indirect cost allocation rate, computed as a percentage of direct labor costs. | ||||||||||
| At the beginning of 2011, managing partner Judi Johnson prepared the following budget: | ||||||||||
| Direct Labor Hours | 10,000 | hours | ||||||||
| Direct Labor Costs | $ 1,400,000 | |||||||||
| Support Staff Salaries | $ 170,000 | |||||||||
| Computer Leases | $ 49,000 | |||||||||
| Office Supplies | $ 29,000 | |||||||||
| Office Rent | $ 60,000 | |||||||||
| In November 2011, Widget Design served several clients. Records for two clients appear here: | ||||||||||
| Dining Coop | Root Chocolates | |||||||||
| Direct labor hours | 740 hours | 65 | hours | |||||||
| Software licensing costs | $ 2,100 | $ 300 | ||||||||
| Travel costs | $ 9,000 | $ – | ||||||||
| Deliverables | ||||||||||
| 1. | Compute Design’s predetermined indirect cost allocation rate for 2011. | |||||||||
| 2. | Compute the total cost of each job. | |||||||||
| 3. | If Design’s inc wants to earn profits equal to 20% of sales revenue, how much (what fee) should | |||||||||
| it charge each of these two clients? | ||||||||||
| 4. | Why does Widget Design assign costs to jobs? | |||||||||
| Deliverable 1 | ||||||||||
| The predetermined indirect cost allocation rate = | ||||||||||
| HINT: | Do this with a formula showing indirect costs to total direct labor costs | |||||||||
| Deliverable 2 | ||||||||||
| First enter in the direct costs for each job. Then enter in the indirect costs and total | ||||||||||
| costs for the jobs. | ||||||||||
| Make sure to enter “0” in the appropriate column. Enter percentage amounts as a whole | ||||||||||
| number. Round your answers to the nearest whole dollar. | ||||||||||
| Widget Design, Inc. | ||||||||||
| Estimated Cost of Dining Coop and Root Chocolates Jobs | ||||||||||
| Dining Coop | Root Chocolates | |||||||||
| Direct Costs: | ||||||||||
| Direct labor | ||||||||||
| Software licensing costs | ||||||||||
| Travel | ||||||||||
| Total Direct Costs | ||||||||||
| Indirect Costs: | ||||||||||
| $ – | ||||||||||
| $ – | ||||||||||
| Total Cost | $ – | $ – | ||||||||
| Deliverable 3 | ||||||||||
| Determine the amount Robin Design, Inc. should charge these clients. | ||||||||||
| (Round your answers to the nearest whole dollar.) | ||||||||||
| Dining Coop: | ||||||||||
| Root Chocolates: | ||||||||||
| Deliverable 4 | ||||||||||
| Widget Designs, Inc. assigns costs to jobs to help the company | ||||||||||
| Assigning costs to: | ||||||||||
Looking for top-notch essay writing services? We've got you covered! Connect with our writing experts today. Placing your order is easy, taking less than 5 minutes. Click below to get started.
Order a Similar Paper Order a Different Paper
