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Pelican Design is an interior design firm. The firm uses a job cost system in which each client is a different job. Pelican Design traces
Pelican Design is an interior design firm. The firm uses a job cost system in which each client is a different "job." Pelican Design traces direct labor, licensing costs, and travel costs directly to each job (client). It allocates indirect costs to jobs based on a predetermined indirect cost allocation rate computed as a percentage of direct labor costs. X 1 Data Table i Direct labor hours (professional) 8,000 hours Direct labor costs (professional) .....$ 1,200,000 Support staff salaries $ 140,000 Computer lease payments $ 47,000 Office supplies.. 27,000 Office rent. ... $ 62,000 Print Done Data Table X 1 Dining Treats GoGreen.com Direct labor hours .. 790 hours 25 hours Licensing costs ....... $ 2,100 $ 500 Travel costs 11,000 $ 0 $ Print Done Requirements 1. Compute Pelican Design's predetermined indirect cost allocation rate for the current year. 2. Compute the total cost of each of the two jobs listed. 3. If Pelican Design wants to earn profits equal to 20% of sales revenue, how much (what total fee) should the company charge each of these two clients? 4. Why does Pelican Design assign costs to jobs? Print Done
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