Question
Sofa Gomez runs a mobile pet grooming service. She charges $31 direct labor per grooming hour. She applies overhead to jobs on the basis of
Sofa Gomez runs a mobile pet grooming service. She charges $31 direct labor per grooming hour. She applies overhead to jobs on the basis of grooming hours. She predicts 810 grooming hours for the year. Her estimated overhead costs for the year follow. Van depreciation $ 6,370 Van insurance expense $ 1,010 Tool depreciation $ 360 Van maintenance 1,220 Indirect materials 610 Other overhead 960
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 15 direct labor grooming hours. Compute her total cost (direct labor plus applied overhead) for this job.
3. If Sofa targets a markup of 20% on the total cost for each job, what price should she quote for the job in part2?
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