Question
QuickBooks LLC offers bookkeeping services to small businesses. Each job takes approximately 10 hours. The company anticipates 500 jobs annually. They have invested $500,000 in
QuickBooks LLC offers bookkeeping services to small businesses. Each job takes approximately 10 hours. The company anticipates 500 jobs annually. They have invested $500,000 in their facilities and expect an ROI of 20%. The budgeted costs for the coming year are shown below:
| Cost Item | Per Job ($) | Total ($) |
|---|---|---|
| Direct Materials (Software) | 15 | 7,500 |
| Direct Labor (Bookkeepers) | 50 | 25,000 |
| Variable Overhead | 10 | 5,000 |
| Fixed Overhead | - | 80,000 |
| Variable Selling & Admin Expenses | 5 | 2,500 |
| Fixed Selling & Admin Expenses | - | 30,000 |
Required:
- Calculate the total cost per job.
- Determine the desired ROI per job.
- Compute the target price per job.
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Financial Accounting
Authors: J. David Spiceland, Wayne Thomas, Don Herrmann
2nd Edition
0078110823, 9780078110825
