Question

This problem continues the Daniels Consulting situation from Problem P16-42 of Chapter 16. Daniels Consulting uses a job order costing system in which each client is a different job. Daniels assigns direct labor, meal per diem, and travel costs directly to each job. It allocates indirect costs to jobs based on a predetermined overhead allocation rate, computed as a percentage of direct labor costs.
At the beginning of 2018, the controller prepared the following budget:
Direct labor hours (professionals)........ 6,250 hours
Direct labor costs (professionals)........ $ 1,100,000
Support staff salaries............... 90,000
Computer leases................ 57,000
Office supplies................ 40,000
Office rent................. 55,000
In November 2018, Daniels served several clients. Records for two clients appear here:
Requirements
1. Compute Daniels’s predetermined overhead allocation rate for 2018.
2. Compute the total cost of each job.
3. If Daniels wants to earn profits equal to 25% of sales revenue, what fee should it charge each of these two clients?
4. Why does Daniels assign costs to jobs?


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  • CreatedJune 15, 2015
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