Question

Baptiste Accounting Services expects its accountants to work a total of 34 comma 000 direct labor hours per year. The​ company's estimated total indirect costs are $ 153 comma 000. The direct labor rate is $ 104 per hour. The company uses direct labor hours as the allocation base for indirect costs. If Baptiste performs a job requiring 54 hours of direct labor and bills the client using a standard markup of 40​% of​ costs, calculate the amount of the​ client's bill.​ (Round any intermediate calculations to the nearest​ cent, and your final answer to the nearest​ dollar.)

Answer 1

Answer:

The client was billed for 8,202.6‬

Explanation:

$\frac{Cost\: Of \:Manufacturing \:Overhead}{Cost \:Driver}= Overhead \:Rate$

We need to know the predetermined overhead rate

Which is the expected cost distribute along acost dirver. In this case, labor hour:

$ 153,000 / 34,000 labor hours= $ 4.5 overhead per hour

Then, we calculate the cost of the job and the markup:

54 hours x (104 + 4.5) = 5,859

Last, markup of 40% of cost:

5,859 x ( 1 + 40%) = 8,202.6‬