Refer to Short Exercise S19-10. Haworth desires a 20% target operating income after covering all costs. Considering
Question:
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.
Step by Step Answer:
Horngrens Financial And Managerial Accounting
ISBN: 9780134486833
6th Edition
Authors: Tracie Miller Nobles, Brenda Mattison, Ella Mae Matsumura