Question
Sofa Gomez runs a mobile pet grooming service. She charges $24 direct labor per grooming hour. She applies overhead to jobs on the basis of
Sofa Gomez runs a mobile pet grooming service. She charges $24 direct labor per grooming hour. She applies overhead to jobs on the basis of grooming hours. She predicts 830 grooming hours for the year. Her estimated overhead costs for the year follow.
Van depreciation | $ 4,020 | Van insurance expense | $ 1,030 | Tool depreciation | $ 380 |
Van maintenance | 1,260 | Indirect materials | 630 | Other overhead | 980 |
1. Compute the predetermined overhead rate using estimated grooming hours. 2. Sofa has been asked to groom 3 large dogs. She expects this job to require a total of 12 direct labor grooming hours. Compute her total cost (direct labor plus applied overhead) for this job. 3. If Sofa targets a markup of 25% on the total cost for each job, what price should she quote for the job in part2?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started