Question

Falcon Design is an interior design firm. The firm uses a job.cost system in which each client is a different Falcon Design traces direct labor, boensing costs and travel costs directly to each dient alocales indred costs to Jobs based on a predetermined indirect cost allocation rate computed as a percentage of direct labor Al the beginning of the current year, managing partner Cadence Winston prepared the following budget (Click the icon to view the prepared budget) Later that same year in November, Falcon Design served several clients. Records for two cents appear here: Co the con lo view the records for the ents) Read the women's Requirements Requirement 1. Compute Falcon Design's predetermined indirect cost a location Tute for the current year Identify the formula, the compute the rate (Enter the rest as a whole number) Predetermined indirect 1. Compute Falcon Design's predetermined indirect cost allocation rate for the current year 2. Compute the total cost of each of the two jobs isted 3. Falcon Design wants to eam profits equal to 40% of sales revenue, how much (what totale) should the company charge each of these two clients ? 4. Why does Falcon Design assign costs to jobs? Print Done

Answer 1

Il falcon Design is an interior design fiom Real ESHmated Indizet cost estimated Didect labor cost $ 250,000 11 000 000 predetermined indect cost Anocation pate 25% - Estimated Indisect cost : 120000 + B 45000 + $ 25000 + 60 000 250000 Rea 21 TOTal cost of two Jobs: Falcon Design Inc. Estimated cost of organic food and TOP STOr.com organic opstar Fooa com Direct COST DOCH I abon 720 Hour X $160 Pes HOUR $ 115200 55Hour X $160pes Hour $$8800 Licensing cost B 2600 & 250 Ta avel cost 12000 $0 TOTO Disca cost $ 129800 s 9050 Allocated indle CH Cost S 115200 X 25% & 28800 $ 8800 X 25% 2200 158600 12 50 Total cost - Direct rabor Ho Rale per Hours = 1,000,000: 6250 Hour $ 160 pes Hous"

If falcon design wants to ean profteaual to organic foods 6396,500 TOP stor com & 28, 125 - Explanation: Doganic food: $ 158600 - 40% = 396,500 2) Topstar.com - $ 11250 = 40% = 28, 125 (47 Why does Falcon Design assign cost to job 2 > Falcon Design assion cost to job to help the company set fees that cover all cost and contribute to profit - Assigning costs to individual clients can also help to control cost.