Question
Sofia Gomez runs a mobile pet grooming service. She charges $30 direct labor per grooming hour. She applies overhead to jobs on the basis
Sofia Gomez runs a mobile pet grooming service. She charges $30 direct labor per grooming hour. She applies overhead to jobs on the basis of grooming hours. She predicts 1,000 grooming hours for the year. Her estimated overhead costs for the year follow. Van depreciation Van maintenance $9,700 Van insurance expense 1,600 Indirect materials $1,200 Tool depreciation 800 Other overhead $ 550 1,150 1. Compute the predetermined overhead rate using estimated grooming hours. 2. Sofia has been asked to groom 3 large dogs. She expects this job to require a total of 9 direct labor grooming hours. Compute her total cost (direct labor plus applied overhead) for this job. 3. If Sofia targets a markup of 20% on the total cost for each job, what price should she quote for the job in part 2? 1. Predetermined overhead rate 2. Total job cost 3. Price quote Diaz and Associates Incurred the following direct labor costs in completing tax services job for a client. Diaz applies overhead at 60% of direct labor cost Direct Labor on Tax Job Partner Senior manager Staff accountants Bours Hourly Used Rate 3 $530 17 100 90 60 1. Determine the total cost of this tax services job. Direct labor type Estimated Cost Hours used Hourly rate Labor Cost Total Cost Total direct labor cost Overwa OH Base OH rate Estimated Applied Overhead Total cost 2. If Diaz charged $23,000 for this tax services job, what is the gross profit for the job? Gross Profit
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered 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