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Craden Solutions designs Web pages for clients in the education sector. The company's job-costing system has a single direct cost category (Web-designing labor) and a
Craden Solutions designs Web pages for clients in the education sector. The company's job-costing system has a single direct cost category (Web-designing labor) and a single indirect cost pool composed of all overhead costs. Overhead costs are allocated to individual jobs based on direct labor-hours. The company employs six Web designers. Budgeted and actual information regarding Craden Solutions follows: (Click the icon to view the data.) Requirement 1. Compute the direct-cost rate and the indirect-cost rate per Web-designing labor-hour for 2020 under (a) actual costing; (b) normal costing, and (c) the variation from normal costing that uses budgeted rates for direct costs. Begin by identifying the formula to calculate the actual indirect-cost rate. Identify the formula to calculate the budgeted indirect-cost rate. Identify the formula to calculate the budgeted direct-cost rate. Data table Requirement 2. Which method would you suggest Craden Solutions use? Explain. Craden Solutions should choose a job-costing system based on the information available to them. If Craden Solutions knows as the jobs are being done, I would recommend Craden Solutions use by calculating a to cost jobs. enables Craden Solutions to use the cost of a job as soon as the job is completed. Identify the formulas to calculate the direct and indirect-costs under normal costing. (b) Normal costing: Direct-costs = Indirect-costs = Identify the formulas to calculate the direct and indirect-costs under the variation of normal costing. What would the cost of this job be under each of the costing methods in requirement 1 ? Craden Solutions designs Web pages for clients in the education sector. The company's job-costing system has a single If Craden Solutions does not know Solutions use as the jobs are being completed, I would recommend that Craden This would allow Craden Solutions to estimate costs on a more-timely basis. Requirement 3. Craden Solutions' Web design for Greenville Day School was budgeted to take 85 direct labor-hours. The actual time spent on the project was 70 hours. Compute the cost of the Greenville Day School job using (a) actual costing, (b) normal costing, and (c) the variation from normal costing that uses budgeted rates for direct costs. Begin by identifying the formulas to calculate the direct and indirect-costs under actual costing. (a) Actual costing: Direct-costs = Indirect-costs = Identify the formulas to calculate the direct and indirect-costs under normal costing. (b) Normal costing: Identify the formulas to calculate the direct and indirect-costs under the variation of normal costing
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