Food Place Martin Chocolates Direct labor hours 600 hours 500 hours Software licensing costs $ 5,000 $ 500 Travel costs 11,000 0 Direct labor hours (professionals) Direct labor costs (professionals) Support staff salaries Computer leases Office supplies Office rent 10,000 hours $ 2,100,000 700,000 49,000 28,000 63,000 Food Place Martin Chocolates Direct labor hours 600 hours 500 hours Software licensing costs $ 5,000 $ 500 Travel costs 11,000 0 Dove 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. Dove Design assigns direct labor, licensing costs, and travel costs directly to each job. It allocates indirect costs to jobs based on a predetermined overhead allocation rate, computed as a percentage of direct labor costs. Read the requirements. At the beginning of 2018, managing partner Janie Ginger prepared the following budget estimates: (Click the icon to view the prepared budget.) In November 2018, Dove Design served several clients. Records for two clients appear here: (Click the icon to view the records for two clients.) Requirement 1. Compute Dove Design's direct labor rate and its predetermined overhead allocation rate for 2018. (Abbreviation used: OH = overhead.) Begin with the direct labor rate. = Compute Dove Design's predetermined overhead cost allocation rate for 2018. Direct labor rate per hour = Predetermined OH cost allocation rate = % Requirement 2. Compute the total cost of each job. First, enter the direct costs for each job. Then enter in the indirect costs and compute the total cost for each job. (Enter a "0" for any zero balances.) Dove Design, Inc. Estimated Cost of Food Place and Martin Chocolates Jobs Direct Costs: Food Place Martin Chocolates Direct Costs: hrs. x hrs. x Total Direct Costs Allocated Indirect Costs: % x Total Costs % x % x Requirement 3. If Ginger wants to earn profits equal to 20% of service revenue, what fee should she charge each of these two clients? Food Place Martin Chocolates 69 Requirement 3. If Ginger wants to earn profits equal to 20% of service revenue, what fee should she charge each of these two clients? Food Place Martin Chocolates Requirement 4. Why does Dove Design assign costs to jobs? Dove Design assigns costs to jobs to help the company to that cover all costs and contribute to profit. Assigning costs also can help Dove Design control costs.