The Joshi CPA firm has the following budget for 2010:

Direct labor (for professional hours charged to clients) ......$180,000

Overhead

Indirect materials ..................... $ 25,000

Indirect labor ........................ 125,000

Depreciation—Building .................... 25,000

Depreciation—Furniture ................... 2,500

Utilities ......................... 28,000

Insurance ......................... 2,400

Property taxes ....................... 2,600

Other expenses ........................ 14,500

Total .......................... $225,000

The firm uses direct labor cost as the cost driver to apply overhead to clients.

During January, the firm worked for many clients; data for two of them follow:

Barry account

Direct labor .......$2,200

Miles account

Direct labor .......$8,400

Required

1. Compute Joshi’s budgeted overhead rate. Explain how this is used.

2. Compute the amount of overhead to be charged to the Barry and Miles accounts using the predetermined overhead rate calculated in requirement 1.

3. Compute a separate job cost for the Barry and the Miles accounts.