Question 1

The consulting firm CMA Financial employs 46 full-time staff. The estimated compensation per employee is $113,400 for 1,800 hours. It charges all direct labour costs to clients. It includes any other costs in a single indirect cost pool and allocates them based on labour hours. Actual indirect costs were $855,700. Estimated indirect costs for the coming year are $1,407,600. The firm expects to have 70 clients in the coming year.

Determine the overhead rate per direct labour hour.

Overhead rate per direct labour hour $

Determine the direct labour rate per hour.

Direct labour rate per hour $

Calculate the total cost of a job that will take 270 direct labour hours, using a normal cost system.

Total cost of the job $