Question

Wong Accounting Services is considering a special order that it received from one of its corporate clients. The special order calls for Wong to prepare the individual tax returns of the corporation’s four largest shareholders. The company has idle capacity that could be used to complete the special order. The following data have been gathered about the preparation of individual tax returns:
Materials cost per page ........... $1
Average hourly labor rate .......... $60
Standard hours per return .......... 4
Standard pages per return .......... 10
Variable overhead cost per page ....... $0.50
Fixed overhead cost per page ....... $0.50
Wong would be satisfied with a $40 gross profit per return. Compute the minimum bid price for the entire order.



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  • CreatedMarch 26, 2014
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