Craig's has asked you to do some job costing for the company. He wants to assure he is charging his customers the right prices and making a profit.

You suggest to him that each client (customer) is a different "job". You will trace direct labor, materials, and travel costs directly to each job (client). Then you will allocate indirect costs to jobs based on a predetermined indirect cost allocation rate computed as a percentage of direct labor costs.

You and Craig prepared the following budget to be used for job costing purposes:

Direct Labor Hours	2,500 hours
Direct Labor Costs	$110,000
Office Salaries (support staff)	$14,000
Depreciation	$4,600
Office Supplies	$2,600
Office Rent	$6,300

During the month of July, Craigs Design and Landscaping served several clients (customers). Here are two of them:

	Cool Cars	Jeffs Jalopies
Direct Labor Hours	70 hours	4 hours
Job Material Costs	$2,300	$300
Traveling Costs	$1,000	$500

Requirements:

1. Compute Craigs predetermined indirect cost allocation rate as a % of direct labor costs for the current year.

2. Compute the total cost of each of the two jobs listed.

3. If Craig wants to earn profits equal to 20% of sales revenue, how much (what total fee) should the company charge each of these two clients?

4. Why does Craig want to assign costs to jobs?

Use the attached Excel Sheet Job Costing for Craig's Landscaping to complete the assignment. Use Job Costing II sheet.

Instructions Job Costing I Job Costing II 1. Compute Craig's predetermined indirect cost allocation rate based on direct labor costs for the current year. Show formula in words and in numbers == 2. Compute the total cost of each of the two jobs listed