client plans to construct a manufacturing plant
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client plans to construct a manufacturing plant that involves multiple engineering disciplines.
Calculate the total engineering fees including taxes based on the following:
Mechanical Works, $1,540,000
Electrical Works, $1,780,000
Earth Works, $950,000
Civil Works, $2,125,100
Environmental Works, $1,325,000
Basis B fees = 9%
There are no office fees
Do not include the construction works as part of the engineering fees.
Taxes = 13%
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- A client plans to construct a manufacturing plant that involves multiple engineering disciplines. Calculate the total engineering fees including taxes based on the following: Mechanical Works, $1,540,000 Electrical Works, $1,780,000 Earth Works, $950,000 Civil Works, $2,125,100 Environmental Works, $1,325,000 Basis B fees = 9% There are no office fees Taxes = 13%How would each of the following costs be classified if units produced is the activity base? a. Salary of factory supervisor ($120,000 per year) b. Straight-line depreciation of plant and equipment c. Property rent of $11,500 per month on plant and equipmentHicks Contracting collects and analyzes cost data in order to track the cost of installing decks on new home construction jobs. The following are some of the costs that they incur. Classify these costs as fixed or variable costs and as product or period costs. Lumber used to construct decks ($12.00 per square foot) Carpenter labor used to construct decks ($10 per hour) Construction supervisor salary ($45,000 per year) Depreciation on tools and equipment ($6,000 per year) Selling and administrative expenses ($35,000 per year) Rent on corporate office space ($34,000 per year) Nails, glue, and other materials required to construct deck (varies per job)
- A company uses charging rates to allocate service department costs to the using departments. The accountant compiled the following information on one of the service departments: If Department K plans to use 1,350 hours of the service departments service in the coming year, how much of the service departments cost is allocated to Department K? a. 3,375 b. 27,300 c. 26,325 d. 23,950Mackenzie Consulting computes the cost of each consulting engagement by adding a portion of the firm wide overhead costs to the labor cost of the consultants on the engagement. The overhead costs are assigned to each consulting engagement using a cost driver rate based on consultant labor costs. Mackenzie Consulting’s overhead costs are $5 million per year, and total consultant labor cost is estimated at $2.5 million per year. Required (a) What is Mackenzie Consulting’s cost driver rate? (b) If the consultant labor cost on an engagement is $25,000, what cost will Mackenzie Consulting compute as the total cost of the consulting engagement?Patterson Lawn Co. wants to determine the cost of each lawn care maintenance job. The Company has two operating departments, one that performs lawn care services for commercial properties and one that services residential properties. Both operating departments are supported by two service departments, administrative and machine maintenance. Costs for each of these supporting departments are as follows: Administrative Machine Maintenance Total cost $576,000 $3,825,000 The following estimates that are related to the operating departments is as follows: Commercial Residential Total properties properties # of employees 68 60 128 # of customers 225 260 485 # of billable hours 23,000 22,000 45,000 Total overhead cost* $ 525,000 $ 450,000 $ 975,000 *Note that total overhead cost includes costs allocated from service departments and other overhead costs. The Company uses the…
- University Printers has two service departments, Maintenance and Personnel, and two operating departments, Printing and Developing. Management has decided to allocate maintenance costs on the basis of machine-hours in each department and personnel costs on the basis of labor-hours worked by the employees in each. The following data appear in the company records for the current period. Maintenance Personnel Printing Developing Machine-hours 1,000 1,000 3,000 2,000 $10,000 Labor-hours. 500 500 Department direct costs. $5,000 $12,000 $15,000 Required Use the direct method to allocate these service department costs to the operating departments.Hicks Contracting collects and analyzes cost data in order to track the cost of installing decks on new home construction jobs. The following are some of the costs that they incur. Classify these costs as fixed or variable costs and as product or period costs. A. Lumber used to construct decks ($12.00 per square foot) B. Carpenter labor used to construct decks ($10 per hour) C. Construction supervisor salary ($45,000 per year) D. Depreciation on tools and equipment ($6,000 per year) E. Selling and administrative expenses ($35,000 per year) F. Rent on corporate office space ($34,000 per year) G. Nails, glue, and other materials required to construct deck (varies per job)Abagail Corp. uses activity-based costing system with three activity cost pools. The following information is provided: Costs: Wages and salaries $ 203,000 Depreciation 111,000 Utilities 114,000 Activity Cost Pools Assembly Setting Up Other Wages and salaries 0.57 30% 10% Depreciation 0.36 45% 20% Utilities 0.29 40% 30% How much total cost would be allocated to the Assembly activity cost pool?
- Classifying Costs as Product or Period Costs Suppose that you have been given a summer job as an intern at Issac Aircams, a company that manufactures sophisticated spy cameras for remote-controlled military reconnaissance aircraft. The company, which is privately owned, has approached a bank for a loan to help finance its growth. The bank requires financial statements before approving the loan. Required: Classify each cost listed below as either a product cost or a period cost for the purpose of preparing financial statements for the bank. 1. Depreciation on salespersons’ cars. 2. Rent on equipment used in the factory. 3. Lubricants used for machine maintenance. 4. Salaries of personnel who work in the finished goods warehouse. 5. Soap and paper towels used by factory workers at the end of a shift. 6. Factory supervisors’ salaries. 7. Heat, water, and power consumed in the factory. 8. Materials used for boxing products for shipment overseas. (Units are not normally boxed.) 9.…Zachary Company makes and sells lawn mowers for which it currently makes the engines. It has an opportunity to purchase the engines from a reliable manufacturer. The annual costs of making the engines are shown here. $ 272,000 Cost of materials (13,600 Units x $20) Labor (13,600 Units x $30) Depreciation on manufacturing equipment* Salary of supervisor of engine production Rental cost of equipment used to make engines Allocated portion of corporate-level facility-sustaining costs 408,000 29,000 74,000 12,000 79,000 Total cost to make 13,600 engines $ 874,000 *The equipment has a book value of $106,000 but its market value is zero. Required a. Determine the maximum price per unit that Zachary would be willing to pay for the engines. b. Determine the maximum price per unit that Zachary would be willing to pay for the engines, if production increased to 17,900 units. (For all requirements, Round your answers to 2 decimal places.) a. Maximum price per unit b. Maximum price per unit4. Hicks Contracting collects and analyzes cost data in order to track the cost of installing decks on new home construction jobs. The following are some of the costs that they incur. Classify these costs as fixed or variable costs and as product or period costs. Costs Variable / Fixed Product / Period Lumber used to construct decks ($12.00 per square foot) Carpenter labor used to construct decks ($10 per hour) Construction supervisor salary ($45,000 per year) Depreciation on tools and equipment ($6,000 per year) Selling and administrative expenses ($35,000 per year) Rent on corporate office space ($34,000 per year) Nails, glue, and other materials required to construct deck (varies per job)
