Tropico Services is a landscaping fir located in Nadi. The following costs were

incurred in the firm's contract to beautify the local hotels:

Direct material

$4 800

Professional labour

$13 000

The firm's budget for the year included the following estimates:

Budgeted overhead

$900 000

Budgeted professional labour $600 000

REQUIRED: Show ALL workings

1. Determine the annual budgeted overhead rate that will be used to apply

overhead to contracts, based on the professional labour cost.

2. Calculate the total cost of the firm's contract to beautify the hotels. Materials are charged directly to each contract:

3. Use the total cost to calculate a service fee, assuming that the company adds

a 42 per cent profit margin to fotal cost.

4. Calculate the fee charged to beautify the hotels, assuming that the firm uses

a chargeout rate of $360 per professional labour hour (which includes a profit

margin of 42 per cent) and 110 hours are worked on this contract. Materials are

charged to the client at cost. 3 marks

5. Explain the key differences between this approach to estimating service fees

and the method described in (3) above. 4 marks.

6. Which method would you recommend for estimating client fees? Explain your answer

ments/AF201%20Test%202%20-%20Question%20Paper.pdf tutorial 15226 Tutorial Wolfram Cloud A Apre TV Hindi Seri AF201 tut S4130 lab 100% o suggene menores Service Costing Tropico Services is a landscaping firm located in Nodi. The following costs were incurred in the firm's contract to beautify the local hotels: Direct material $4800 Professional labour $13 000 The firm's budget for the year included the following estimates: Budgeted overhead $900 000 Budgeted professional labour $600 000 REQUIRED: Show All workings 1. Determine the onnual budgeted overhead rote that will be usud to apply overhead to contracts, bosed on the professional labour cost. 2 marks 2. Calculate the total cost of the firm's contract to beautify the hotels. Materials are charged directly to each contract. 4 marks 3. Use the total cost to calculate a service fee, assuming that the company odds 0 42 per cent profit margin to total cost. 3 marks 4. Calculate the fee charged to beautify the hotels, assuming that the firm uses a chorgeout rate of $360 per professional labour hour (which includes a profit margin of 42 per cent) and 110 hours are worked on this contract. Materials are charged to the client at cost, 3 marks 5. Explo the key differences between this approach to estimating service fees and the method described in (3.) above. 4 marks, Which method would you recommend for estimating client feos? Explain your an wen.marks (hp