Consider the following budgeted data for a client job of Bob Crachit s accounting firm. The client wants a fixed-price quotation. Direct professional labor 20,000 Direct support labor 10,000 Fringe benefits for direct labor 13,000 Photocopying 2,000 Telephone calls 2,000 Computer equipment 6,000 Overhead is allocated at the rate of 100% of direct labor cost. A. Prepare a schedule of the budgeted total costs for the client. Show subtotals for total direct labor costs and total costs as a basis for markup. B. Assume that the partner s policy is to quote a fixed fee at 10% above the total costs. What fee would be quoted?

Consider the following budgeted data for a client job of Bob Crachit s accounting firm. The client wants a fixed-price quotation. Direct professional labor 20,000 Direct support labor 10,000 Fringe benefits for direct labor 13,000 Photocopying 2,000 Telephone calls 2,000 Computer equipment 6,000 Overhead is allocated at the rate of 100% of direct labor cost. A. Prepare a schedule of the budgeted total costs for the client. Show subtotals for total direct labor costs and total costs as a basis for markup. B. Assume that the partner s policy is to quote a fixed fee at 10% above the total costs. What fee would be quoted?

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter3: Cost Behavior And Cost Forecasting

Section: Chapter Questions

Problem 20BEA: Using Regression to Calculate Fixed Cost, Calculate the Variable Rate, Construct a Cost Formula, and...

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Using Regression to Calculate Fixed Cost, Calculate the Variable Rate, Construct a Cost Formula, and Determine Budgeted Cost Refer to the information for Pizza Vesuvio on the previous page. Coefficients shown by a regression program for Pizza Vesuvios data are: Required: Use the results of regression to make the following calculations: 1. Calculate the fixed cost of labor and the variable rate per employee hour. 2. Construct the cost formula for total labor cost. 3. Calculate the budgeted cost for next month, assuming that 675 employee hours are budgeted. (Note: Round answers to the nearest dollar.) Use the following information for Brief Exercises 3-17 through 3-20: Pizza Vesuvio makes specialty pizzas. Data for the past 8 months were collected:
Friendly Bank is attempting to determine the cost behavior of its small business lending operations. One of the major activities is the application activity. Two possible activity drivers have been mentioned: application hours (number of hours to complete the application) and number of applications. The bank controller has accumulated the following data for the setup activity: Required: 1. Estimate a regression equation with application hours as the activity driver and the only independent variable. If the bank forecasts 2,600 application hours for the next month, what will be the budgeted application cost? 2. Estimate a regression equation with number of applications as the activity driver and the only independent variable. If the bank forecasts 80 applications for the next month, what will be the budgeted application cost? 3. Which of the two regression equations do you think does a better job of predicting application costs? Explain. 4. Run a multiple regression to determine the cost equation using both activity drivers. What are the budgeted application costs for 2,600 application hours and 80 applications?
Compute the budgeted overhead rate for the coming year, using direct labor dollars as the overhead allocation base.
D Coronado Industries provides financial consulting and sells its own line of financial planners and budgeting products. The company has collected the following data for the next year's budgeted activity for a lead consultant and the supplies clerk. W S Consultants' wages Benefits Related overhead Clerk's wages Benefits Related overhead Profit margin per hour Profit margin on materials Total estimated consulting hours Total estimated material costs O $30.48. O $52.00. O $32.00. O $16.00. Save for Later # 3 E The labor rate per hour for this consultant is D с $ t R $90000 50000 LL 20000 $18000 3000 21000 $20 5000 $174000 15 % % G Search or type URL T MacBook Pro G ^ 6 Y & 7 H U * CO 8 Attempts: 0 of 1 used J + - - 9 K Submit Answer ) O 3 L P
Swifty Corporation provides financial consulting and sells its own line of financial planners and budgeting products. The company has collected the following data for the next year's budgeted activity for a lead consultant and the supplies clerk. Consultants' wages Benefits Related overhead Clerk's wages Benefits Related overhead Profit margin per hour Profit margin on materials Total estimated consulting hours Total estimated material costs $100000 O $19.00. O $58.00. O $50.67. O $38.00. 60000 30000 $19000 3000 15000 $20 The labor rate per hour for this consultant is 15 % 5000 $172000
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Prepare a 12-month Master Budget for a company of your choosing. It can be a company that you are closely connect too or one randomly selected. COMPLETED IN EXCEL. As you are preparing the Master Budget, some information is NOT provided. You are required to decide or predict or forecast this information. Provide an introduction for the company you have chosen. The introduction should include the following: Name of company Location of company Name of owner Nature of the business. Type of product Fiscal period For the company that you have selected - Prepare a 12-month Master Budget. Your submission must show each month’s activities. Here are some considerations to include in preparing the budget: You must forecast your sales, purchases, direct labour and manufacturing overhead for each month and any other information as required All sales are on accounts Expected collections are to be 50% in the month of the sale, 30 % in the first month following the sale, and 20% in the second…
A local engineering firm is bidding on a design project for a new client. The total budgeted direct-labor costs for the firm are $600,000. The total budgeted indirect costs are $800,000. It is estimated that there are 10,000 billable hours in total. a. What is the budgeted direct-labor cost rate? b. What is the budgeted indirect-cost rate assuming direct-labor cost is the allocation base? c. What should be the engineering firm bid on the project if the direct labor hours are estimated at 300 hours?
Howard Cooper, the president of Campbell Computer Services, needs your help. He wonders about the potential effects on the firm's net income if he changes the service rate that the firm charges its customers. The following basic data pertain to fiscal Year 3. Standard rate and variable costs Service rate per hour $ 85.00 Labor cost 37.00 Overhead cost 7.10 Selling, general, and administrative cost Expected fixed costs Facility maintenance Selling, general, and administrative 3.80 $522,000 142,000 Required: a. Prepare the pro forma income statement that would appear in the master budget if the firm expects to provide 45,000 hours of services in Year 3. b. A marketing consultant suggests to Mr. Cooper that the service rate may affect the number of service hours that the firm can achieve. According to the consultant's analysis, if Campbell charges customers $80 per hour, the firm can achieve 50,000 hours of services. Prepare a flexible budget using the consultant's assumption. c. The same…
Practice : (see attachemnt) please address parts B, C, D please show any calculations for reference a) What is meant by the term flexible budget? What role do flexible budgets play in evaluating performance? The cost accountant for Bradley, Inc., prepared the following monthly performance report relating to the Finishing Department: Budgeted Production Actual Production number units: 6000 units 6500 units Direct materials: $90,000 $99,600 Direct labor: $48,000 $55,200 Variable Manufacturing Overhead: $6,000 $9,000 Fixed Manufacturing Overhead: $66,000 $64,200 What would the flexible budget amounts be for each of the following: Direct materials Direct labor Variable manufacturing overhead Compute the…
Rafner Manufacturing identified the following budgeted data in its two production departments. Assembly Finishing Manufacturing overhead costs $ 1,120,800 $ 510,000 Direct labor hours 11,100 DLH 19,100 DLH Machine hours 5,100 MH 15,100 MH Required:What is the company’s assembly department overhead rate using direct labor hours?
Vaughn Manufacturing has the following budgeted costs for the next year: Shop employees' wages and benefits Parts manager's salary and benefits Office employee's salary and benefits Other overhead Invoice cost of parts and materials Total budgeted costs Time Charges O. $42. O $47. O $54. O $44. $125000 25000 15000 $165000 Material Charges $ 50000 20000 55000 450000 $575000 The labor rate to be used next year assuming 7500 hours of repair time and a profit margin of $25 per labor hour is >