Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please show work. Widget Design, Inc., is a web site design and consulting firm. The firm uses a job order costing system, in which each

Please show work.

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed
Widget 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. Widget Design traces direct labor, licensing costs, and travel costs directly to each job. It allocates indirect costs to jobs based on a predetermined indirect cost allocation rate, computed as a percentage of direct labor costs. At the beginning of 2021, managing partner Judi Johnson prepared the following budget: Deliverables Direct Labor Hours 10,000 hours Direct Labor Costs $ 1,400,000 $ 140 per hour 1. Compute Widget Design's predetermined indirect cost allocation rate for 2021. 2. Compute the total cost of each job. Indirect Costs: 3. If Widget wants to earn profits equal to 20% of sales revenue, how much (what fee) should Support Staff Salaries 170,000 it charge each of these two clients? Computer Leases 49,000 4. Why does Widget Design assign costs to jobs? Office Supplies 29,000 Office Rent 60,000 308,000 In November 2021, Widget Design served several clients. Records for two clients appear here: Dining Coop Root Chocolates Direct labor hours 740 hours 65 hours Software licensing costs 2,100 300 Travel costs 9,00022 Deliverable 1 23 The predetermined indirect cost allocation rate = 24 25 26 HINT: Do this with a formula showing indirect costs to total direct labor costs 27 289 Deliverable 2 O First enter in the direct costs for each job. Then enter in the indirect costs and total costs for the jobs. Make sure to enter "0" in the appropriate column. Enter percentage amounts as a whole number. Round your answers to the nearest whole dollar. Widget Design, Inc. Estimated Cost of Dining Coop and Root Chocolates Jobs Root Chocolate Dining Coop S Direct Costs: Direct labor hrs x $140/hr hrs x $140/hr S Software licensing costs Travel Total Direct Costs Indirect Costs: 7 ermined indirect cost allocation rate x direct labor cost of job B ermined indirect cost allocation rate x direct labor cost of job 9 Total CostDeliverable 3 Determine the amount Robin Design, Inc. should charge these clients. Excel Coach: (Round your answers to the nearest whole dollar.) Use algebra to calculate your Dining Coop: answer 1X - 137,492 = .20X Root Chocolates

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting The Cornerstone Of Business Decision Making

Authors: Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

8th Edition

0357715349, 978-0357715345

More Books

Students also viewed these Accounting questions

Question

What is meant by Career Planning and development ?

Answered: 1 week ago

Question

What are Fringe Benefits ? List out some.

Answered: 1 week ago

Question

Do not go, wait until I come

Answered: 1 week ago

Question

Pay him, do not wait until I sign

Answered: 1 week ago