Crow Design, Inc. is a website design and consulting firm. The firm uses a job order costing system in which each client is a different job. Crow Design assigns direct labor, licensing costs, and travel costs directly to each job. It allocates indirect costs to jobs based on a predetermined overhead allocation rate, computed as a percentage of direct labor costs. At the beginning of 2014, managing partner Sally Simone prepared the following budget estimates:

In November 2014, Crow Design served several clients. Records for two clients appear here:

Requirements
1. Compute Crow Design’s direct labor rate and its predetermined overhead ­allocation rate for 2014.
2. Compute the total cost of each job.
3. If Simone wants to earn profits equal to 50% of service revenue, what fee should she charge each of these two clients?
4. Why does Crow Design assign costs tojobs?

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6,250 hours Direct labor hours (professionals) Direct labor costs (professionals) 1800,000 Support staff salaries Computer leases Office supplies Office remt 765,000 46,000 27,000 62,000 Delicious Treats Mesilla Chocolates 100 hours Direct labor hours Software licensing costs Travel costs 700 hours 400 4,000 8,000