Refer to Short Exercise S19-10. Haworth desires a 20% target operating income after covering all costs. Considering

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Refer to Short Exercise S19-10. Haworth desires a 20% target operating income after covering all costs. Considering the total costs assigned to the Client 76 job in Short Exercise S19-10, what would Haworth have to charge the customer to achieve that operating income? Round to two decimal places.


Data from S19-10

Haworth Company is a management consulting firm. The company expects to incur $167,500 of indirect costs this year. Indirect costs are allocated based on the following activities: 


Haworth bills clients at 120% of the direct labor costs. The company has estimated direct labor costs at $240 per hour. Last month, Haworth completed a consulting job for Client 76 and used the following resources:

Allocation Base                                 Client 76 

Direct labor hours ....................................60

Visits..............................................................5

Pages ..........................................................50

Determine the total cost of the consulting job and the operating income earned.

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Horngrens Financial And Managerial Accounting

ISBN: 9780134486833

6th Edition

Authors: Tracie Miller Nobles, Brenda Mattison, Ella Mae Matsumura

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