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In: Accounting

Question 1 The consulting firm CMA Financial employs 46 full-time staff. The estimated compensation per employee...

Question 1
The consulting firm CMA Financial employs 46 full-time staff. The estimated compensation per employee is $113,400 for 1,800 hours. It charges all direct labour costs to clients. It includes any other costs in a single indirect cost pool and allocates them based on labour hours. Actual indirect costs were $855,700. Estimated indirect costs for the coming year are $1,407,600. The firm expects to have 70 clients in the coming year.

  
  
  
  


  


Determine the overhead rate per direct labour hour.


Overhead rate per direct labour hour $

  
  
  
  


  


Determine the direct labour rate per hour.


Direct labour rate per hour $

  
  
  
  


  


Calculate the total cost of a job that will take 270 direct labour hours, using a normal cost system.


Total cost of the job $
  
  
  

Solutions

Expert Solution

Overhead rate per direct labour hour $                    17
Overhead rate per direct labour hour $                    63
Total cost of the job $            21,600

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