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Tech Solutions is a consulting firm that uses job-order costing. Its direct materials consist of hardware and software it purchases and installs on behalf
Tech Solutions is a consulting firm that uses job-order costing. Its direct materials consist of hardware and software it purchases and installs on behalf of its clients. The firm's direct labor includes salaries of consultants who work at the client's job site, and its overhead consists of costs such as depreciation, utilities, and insurance related to the office headquarters as well as the office supplies consumed serving clients. Tech Solutions computes its predetermined overhead rate annually based on direct labor-hours. At the beginning of the year, it estimated 60,000 direct labor-hours would be required for the period's estimated level of client service. The company also estimated $390,000 of fixed overhead cost for the coming period and variable overhead of $0.50 per direct labor-hour. The firm's actual overhead cost for the year was $409,300 and its actual total direct labor was 67,450 hours. Required: 1. Compute the predetermined overhead rate. 2. During the year, Tech Solutions started and completed the Xavier Company engagement. The following information was available for this job: Direct materials Direct labor cost Direct labor-hours worked $ 48,450 $25,700 240 Compute the total job cost for Xavier Company. worked 240 Compute the total job cost for Xavier Company. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the total job cost for the Xavier Company engagement. Note: Round your intermediate calculations to 2 decimal places. Direct materials Direct labor Overhead applied Total manufacturing cost Required 1
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