hw1 ch2

required 1&2

Tech Solutions is a consulting firm that uses a job-order costing system. Its direct materials consist of hardware and software that it purchases and installs on behalf of its clients. The firms direct labor includes salaries of consultants that work at the clients job site, and its overhead consists of costs such as depreciation, utilities, and insurance related to the office headquarters as well as the office supplies that are consumed serving clients.

Tech Solutions computes its predetermined overhead rate annually on the basis of direct labor-hours. At the beginning of the year, it estimated that 80,000 direct labor-hours would be required for the periods estimated level of client service. The company also estimated $680,000 of fixed overhead cost for the coming period and variable overhead of $0.50 per direct labor-hour. The firms actual overhead cost for the year was $692,000 and its actual total direct labor was 83,000 hours.

Required:

1. Compute the predetermined overhead rate.

2. During the year, Tech Solutions started and completed the Xavier Company engagement. The following information was available with respect to this job:

Direct materials $ 38,000

Direct labor cost $ 21,000

Direct labor hours worked 280

Compute the total job cost for the Xavier Company engagement.

Direct labor cost $ 21,000 Direct labor hours worked 280 Compute the total job cost for the Xavier Company engagement. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the predetermined overhead rate. Predetermined overhead rate per DLH Required 2