Kevin & Janet is an advertising agency. The firm uses a job cost system in which each client is a different "job." Kevin & Janet traces direct labor, software licensing costs, and travel costs directly to each job (client). The company allocates indirect costs to jobs based on a predetermined indirect cost allocation rate based on direct labor hours.

At the beginning of the current year, managing partner Jerry Annido prepared a budget:

Data Table

Direct labor hours (professional). . . . .	17,500 hours
Direct labor costs (professional). . . . .	$1,750,000
Support staff salaries. . . . . . . . . . . .	$200,000
Rent and utilities. . . . . . . . . . . . . . .	$49,000
Supplies. . . . . . . . . . . . . . . . . . . . . .	$381,000
Lease payments on computer hardware. .	$70,000

During January of the current year, Kevin & Janet served several clients. Records for two clients appear here:

Value Vacation.com

Port Change golf resort

Direct labor hours

720 hours

35 hours

Software licensing costs

$2800

$250

Travel costs

$13000

$0

Requirements

1.	Compute Kevin & JanetKevin & Janet's predetermined indirect cost allocation rate for the current year based on direct labor hours.
2.	Compute the total cost of each job.
3.	If Kevin & JanetKevin & Janet wants to earn profits equal to 20% of salesrevenue, how much (what total fee) should it charge each of these two clients?
4.	Why does Kevin & JanetKevin & Janet assign costs to jobs?