Opinion Research, a marketing research firm, has a cost function for overhead costs of $60,000 per month plus $50 per client hour. In July its overhead allocation rate was calculated assuming 3,000 client hours. Actual overhead costs for July were $220,000, and client hours amounted to 2,800.
A. Determine the total cost for job 717 if direct costs were $52,000 and 850 hours were worked for the client.
B. Provide examples of possible overhead costs for Opinion Research that are: (1) fixed and (2) variable.
C. Determine the amount of over-applied or under-applied overhead for July.