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Exercise 15-28 (Algo) Computing overhead rate; setting price quote-Service company LO A1 Sofa Gomez runs a mobile pet grooming service. She charges $32 direct labor
Exercise 15-28 (Algo) Computing overhead rate; setting price quote-Service company LO A1 Sofa Gomez runs a mobile pet grooming service. She charges $32 direct labor per grooming hour. She applies overhead to jobs on the basis of grooming hours. She predicts 920 grooming hours for the year. Her estimated overhead costs for the year follow. Van depreciation Van maintenance $5,300 Van insurance expense 1,440 Indirect materials $1,120 Tool depreciation 720 Other overhead $470 1,070 1. Compute the predetermined overhead rate using estimated grooming hours. 2. Sofa has been asked to groom 3 large dogs. She expects this job to require a total of 12 direct labor grooming hours. Compute her total cost (direct labor plus applied overhead) for this job. 3. If Sofa targets a markup of 25% on the total cost for each job, what price should she quote for the job in part 2
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