Question

Homework - Chapter 2 G Saved 4 Exercise 2-6 Job-Order Costing for a Service Company [LO2-1, LO2-2, LO2-3] Tech Solutions is a consulting firm that uses a job-order costing system. Its direct materials consist of hardware and software that it purchases and installs on behalf of its clients. The firm's direct labor includes salaries of consultants that work at the client's job site and its overhead consists of costs such as depreciation, utilities, and insurance related to the office headquarters as well as the office supplies that are consumed serving clients 14.28 points Tech Solutions computes its predetermined overhead rate annually on the basis of direct labor-hours. At the beginning of the year, it estimated that 62,500 direct labor-hours would be required for the period's estimated level of client service. The company also estimated $437,500 of fixed overhead cost for the coming period and variable overhead of $0.50 per direct labor-hour. The firm's actual overhead cost for the year was $458,000 and its actual total direct labor was 67150 hours eBook Hint Required 1. Compute the predetermined overhead rate 2. During the year, Tech Solutions started and completed the Xavier Company engagement. The following information was available with respect to this job Print References Direct materials Direct labor cost Direct labor hours worked $42,000 $ 26,400 250 Compute the total job cost for the Xavier Company engagement. Complete this question by entering your answers in the tabs below. Required 1Required 2 Compute the predetermined overhead rate. (Round your answer to 2 decimal places.) redetermined overhead rate per DLH Required 2>

Answer 1

* Requirement 1

A	Total estimated fixed overheads	$437,500
B	Total estimated direct labor hours	62,500
C = A/B	Fixed overhead rate	$7.00
D	Variable overhead rate	$0.50
E = C+D	Predetermined Overhead rate	$7.50 per direct labor hour = ANSWER

* Requirement 2

A	Direct Materials	$42,000
B	Direct Labor	$26,400
C = 250 direct labor hours x $ 7.50 per DLH	Overhead applied	$1,875
D = A+B+C	Total manufacturing cost	$70,275 = Answer