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Haworth Company is a management consulting firm. The company expects to incur $126,000 of indirect costs this year. Indirect costs are allocated based on the
Haworth Company is a management consulting firm. The company expects to incur $126,000 of indirect costs this year. Indirect costs are allocated based on the following activities:
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Determine the total cost of the consulting job and the operating income earned. (DROP DOWN OPTIONS IN IMAGE BELOW)
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Data table Estimated Quantity of Allocation Base Predetermined Overhead Allocation Rate Activity Estimated Cost Allocation Base Site visits 600 visits $90 per visit Documentation preparation 54,000 Number of visits 72,000 Number of pages 126,000 2,400 pages $30 per page $ Total indirect costs More info Haworth bills clients at 150% of the direct labor costs. The company has estimated direct labor costs at $260 per hour. Last month, Haworth completed a consulting job for Client 76 and used the following resources: Allocation Base Client 76 Direct labor hours 55 Visits 6 Pages 30 Begin by selecting the formula to compute the allocated overhead (OH) cost. Allocated overhead costs X Compute the total allocated overhead cost of the job. Allocated Activity overhead costs Site visits Document preparation Total Now calculate the total cost of the consulting job. Total cost of job The operating income earned on the consulting job amounts to $ Begin by selecting the formula to compute the allocated overhead (OH) cost. Allocated = overhead costs Compute the total allocated overhead cost of the job. Allocated overhead costs Activity Site visits Document preparation Total Actual overhead costs Actual qty of the allocation base used Estimated overhead costs Estimated qty of the allocation base Predetermined OH allocation rate Now calculate the total cost of the consulting job. Total cost of job The operating income earned on the consulting job amounts to Now calculate the total cost of the consulting job. Allocated overhead costs Estimated direct labor cost Estimated indirect costs Total direct labor cost the consulting job amounts to DLAC LIL ACCOUNTING LATTAStep by Step Solution
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