Tech Solutions is a consulting firm that uses job - order costing. Its direct materials consist of hardware and software it purchases and installs on behalf of its clients. The firm's direct labor includes salaries of consultants who work at the client's job site, and its overhead consists of costs such as depreciation, utilities, and insurance related to the office headquarters as well as the office supplies consumed serving clients. Tech Solutions computes its predetermined overhead rate annually based on direct labor - hours. At the beginning of the year, it estimated 85,000 direct labor - hours would be required for the period's estimated level of client service. The company also estimated $935, 000 of fixed overhead cost for the coming period and variable overhead of $0.50 per direct labor - hour. The firm's actual overhead cost for the year was $952, 900 and its actual total direct labor was 89, 050 hours. Required: Compute the predetermined overhead rate. During the year, Tech Solutions started and completed the Xavier Company engagement. The following information was available for this job: Direct materials $ 44, 100 Direct labor cost $30, 800 Direct labor - hours worked 340 Compute the total job cost for Xavier Company.
Tech Solutions is a consulting firm that uses job - order costing. Its direct materials consist of hardware and software it purchases and installs on behalf of its clients. The firm's direct labor includes salaries of consultants who work at the client's job site, and its overhead consists of costs such as depreciation, utilities, and insurance related to the office headquarters as well as the office supplies consumed serving clients. Tech Solutions computes its predetermined overhead rate annually based on direct labor - hours. At the beginning of the year, it estimated 85,000 direct labor - hours would be required for the period's estimated level of client service. The company also estimated $935, 000 of fixed overhead cost for the coming period and variable overhead of $0.50 per direct labor - hour. The firm's actual overhead cost for the year was $952, 900 and its actual total direct labor was 89, 050 hours. Required: Compute the predetermined overhead rate. During the year, Tech Solutions started and completed the Xavier Company engagement. The following information was available for this job: Direct materials $ 44, 100 Direct labor cost $30, 800 Direct labor - hours worked 340 Compute the total job cost for Xavier Company.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Tech Solutions is a consulting firm that uses job - order
costing. Its direct materials consist of hardware and
software it purchases and installs on behalf of its clients.
The firm's direct labor includes salaries of consultants
who work at the client's job site, and its overhead
consists of costs such as depreciation, utilities, and
insurance related to the office headquarters as well as
the office supplies consumed serving clients. Tech
Solutions computes its predetermined overhead rate
annually based on direct labor - hours. At the beginning
of the year, it estimated 85,000 direct labor - hours
would be required for the period's estimated level of
client service. The company also estimated $935,000 of
fixed overhead cost for the coming period and variable
overhead of $0.50 per direct labor - hour. The firm's
actual overhead cost for the year was $952, 900 and its
actual total direct labor was 89, 050 hours. Required:
Compute the predetermined overhead rate. During the
year, Tech Solutions started and completed the Xavier
Company engagement. The following information was
available for this job: Direct materials $ 44, 100 Direct
labor cost $ 30, 800 Direct labor - hours worked 340
Compute the total job cost for Xavier Company.
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