3. Robin 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. Robin 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 Jacquin prepared the following budget:

In November 2011, Robin Design served several clients. Records for two clients appear here:

Requirements

R1. Compute Robin Designs predetermined indirect cost allocation rate for 2011.

R2. Compute the total cost of each job.

R3. If Jacquin wants to earn profits equal to 20% of service revenue, how much (what fee) should she charge each of these two clients?

R4. Why does Robin Design assign costs to jobs?

Direct labor hours (professional) Direct labor costs (professional) 10,000 hours $1,400,000 170,000 49,000 29,000 60,000 Office supplies