P6.38 Job costing and job billing: health resort LO 6.7 6.8 Greenlife is a health resort that
Question:
P6.38 Job costing and job billing: health resort LO 6.7 6.8 Greenlife is a health resort that offers a range of programs for health-conscious managers. Managers who participate are provided with a tailored program, consisting of a series of activities. A job costing system is used to calculate the cost of each program. The manager of Greenlife has designed the following programs for managers at the local water authority: Program A: Health check, 2-hour bushwalk, 30-minute yoga class, 15-minute massage Health check, 1-hour gym workout, 30-minute massage Program B: Program C: Health check, 2-hour bushwalk, 60-minute yoga class, 2-hour gym workout Program D: 1-hour gym workout, 30-minute yoga class, 2-hour bushwalk The following labour costs and overheads apply: Employee Labour cost Overhead applied Chargeout rates Bushwalking leader $ 45 per hour $135 per hour $216 per hour Massage therapist $ 90 per hour $225 per hour $378 per hour Personal trainer (for gym workout) $ 90 per hour $450 per hour $648 per hour Yoga class leader $ 45 per hour $270 per hour $378 per hour Medical doctor (for 30-minute health check) $225 per hour $270 per hour $756 per hour Required 1. Determine the total cost of each of the programs. 2. How might the resort managers use these total costs? 3. Explain why there is a different overhead rate for each class of labour. 4. Calculate the price of each program using the chargeout rates.
Step by Step Answer:
Management Accounting Information For Creating And Managing Value
ISBN: 9781743767603
9th Edition
Authors: Kim Langfield Smith, David Smith, Paul Andon, Ronald W. Hilton