Answered step by step
Verified Expert Solution
Question
1 Approved Answer
15 2 points Exercise 5-33 (Static) Methods of Estimating Costs: Account Analysis (LO 5-1, 2) Hughes Payroll and Clerical Services (HPCS) provides payroll, bookkeeping,
15 2 points Exercise 5-33 (Static) Methods of Estimating Costs: Account Analysis (LO 5-1, 2) Hughes Payroll and Clerical Services (HPCS) provides payroll, bookkeeping, and other services to small businesses. HPCS financial records show the following costs for last quarter (QTR 1): eBook Print References Supplies Employee costs Total administration $ 14,000 1,015,000 455,000 HPCS recorded 4,375 billable hours in QTR 1 and fixed administrative cost was $245,000. Assuming no change in billable hours in the next quarter (QTR 2), supplies costs are expected to increase by 5 percent. Direct labor costs are expected to increase by 12 percent. Variable administration per billable hour is expected to remain the same, but fixed administration cost is expected to decrease by 7 percent. Required: a. HPCS expects to bill 5,425 hours next quarter. What are the estimated direct materials, direct labor, variable overhead, and fixed overhead costs for next quarter (QTR 2)? b. Determine the total costs per billable hour for QTR 1 and QTR 2. Complete this question by entering your answers in the tabs below. Required A Required B HPCS expects to bill 5,425 hours next quarter. What are the estimated direct materials, direct labor, variable overhead, and fixed overhead costs for next quarter (QTR 2)? Note: Do not round intermediate calculations. Cost Item Direct materials Direct labor Variable overhead Fixed overhead Total costs Next Quarter Cost $ 0
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started