(Assigning costs to jobs) Tina Wheels is an advertising consultant; she tracks costs for her jobs using a job order costing system. During September, Tina and her staff worked on and completed jobs for the following companies.

Direct materials can be traced to each job because these costs are typically associated with photography and duplicating. Based on historical data, Tina has calculated an overhead charge of $58 per direct labor hour. The normal labor cost per hour is $45-

a. Determine the total cost for each of the advertising accounts for the month.

b. Determine the cost per ad developed for each client.
C. Tina charges $4,300 per ad developed. What was her net income for the month, assuming actual overhead for the month was $25,000?

d. You suggest to Tina that she bill ads on a cost-plus basis and suggest a mark-up of 30 percent on cost. How would her income have compared to her income computed in part

(c) if she had used this method? How would her clients feel about such a method?LO1.

Transcribed Image Text:

Brandon Company Walker Manufacturing Robbye Inc. Direct material cost $3,900 $7,100 Direct labor cost $2,790 $9,000 $9,900 $14,175 Number of ads designed 3 10 8