The advertising company C-Taylor Agency is bidding on a contract to prepare an a

Question

The advertising company C-Taylor Agency is bidding on a contract to prepare an ad campaign for one of its clients. C-Taylor uses a job order costing system. C-Taylor estimates that the job will take 100 designer hours at $90 per hour and 55 staff hours at $40 per hour. Chumley uses two separate overhead rates in applying overhead its jobs: Designer-related at $25 per designer hour and staff-related at $10 per staff hour. Determine the total estimated cost for this job. (1 point)

ABC Co would like to know what the gross profit is for one of its products. The product sells for $75 each. The production of one unit of its product requires $27.00 of direct materials and $20.00 of direct labor. Each unit is assigned overhead at a rate of 30% of labor costs. What is the gross profit per unit for its product. (1 point)

The advertising company C-Taylor Agency is bidding on a contract to prepare an ad campaign for one of its clients. C-Taylor uses a job order costing system. C-Taylor estimates that the job will take 100 designer hours at $90 per hour and 55 staff hours at $40 per hour. Chumley uses two separate overhead rates in applying overhead its jobs: Designer-related at $25 per designer hour and staff-related at $10 per staff hour. Determine the total estimated cost for this job. (1 point)

Explanation / Answer

Answer:-1)-Total estimated cost for this job={(100 designer hour*$90 per hour)+ (55 staff hour*$40 per hour)+( 100 designer hour*$25 per hour)+ (55 staff hour*$10 per hour)}

=$9000+$2200+$2500+$550

=$14250

2)-Gross profit per unit for product =Sales per unit-(Direct material per unit+ Direct labor per unit+ Overhead per unit)

=$75- {$27+$20+ ($20*30%)}

=$75- ($27+$20+$6)

=$75- $53

=$22 per unit

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