King Company is a consulting firm. The firm expects to have $ 45 comma 500 in in
ID: 2425714 • Letter: K
Question
King Company is a consulting firm. The firm expects to have $ 45 comma 500 in indirect costs during the year and bill customers for 6 comma 500 hours. The cost of direct labor is $ 65 per hour. 16. Calculate the predetermined overhead allocation rate for King . 17. King completed a consulting job for Gavin Green and billed the customer for 14 hours. What was the total cost of the consulting job? 18. If King wants to earn a profit equal to 70 % of the cost of a job, how much should the company charge Mr. Green ? 16. Calculate the predetermined overhead allocation rate for King . Predetermined overhead / = allocation rate / = per hour 17. King completed a consulting job for Gavin Green and billed the customer for 14 hours. What was the total cost of the consulting job? King Company Total Cost of the Green Job hrs. x = + hrs x = Total cost 18. If King wants to earn a profit equal to 70 % of the cost of a job, how much should the company charge Mr. Green ? Add: Required charge for job
Explanation / Answer
16) Predetermined overhead allocation= 500/45= $11.1
17) Total Cost= $65+$11.1= $76.1
18) Profit=70% of cost of job= $76.1*.7=$53.27
Charges= $76.1+53.27= $129.37
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