Question

Haworth Company is a management consulting firm. The company expects to incur $114,000 of indirect costs this year. Indirect costs are allocated based on the following activities: : (Click the icon to view the activities.) (Click the icon to view additional information.) Determine the total cost of the consulting job and the operating income earned.

PLEASE HELP FAST AND ALL IN ACCOUNTING. I WILL RATE 5 STARS.

Answer 1

Predetermined overhead Allocation rate	x	Actual Quantity of the Allocation Base Used	=	AllocatedOverhead Cost
Total allocated overhead cost of the job
Activity			Allocated overhead costs
Site visits                                                [Allocation rate per vist x Number of visits = $110 x 13]			$1,430
Documentation preparation             [Allocation rate per page x Number of pages = $15 x 35]			$525
Total                                                       [$1,430 + $525]			$1,955
Total cost of the consulting job
Estimated direct labor cost              [Number of direct labor hours x Direct labor cost per hour = 90 x $290]			$26,100
Allocated overhead cost                     [Calculated above]			$1,955
Total cost of job                                   [$26,100 + $1,955]			$28,055
The operating income earned on the consulting job amounts to                       [Refer working note]				$13,705

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Working note - Calculation of operating income
Billing price of the price    [Direct labor cost x 160% = $26,100 x 160%]	$41,760
Less: Total cost of the job	$28,055
Operating income	$13,705