Question

ACCT 2102: In Class Problem - Hagan's Mountain Tutors Hagan's Mountain Tutors (HMT) specializes in tutoring college students in accounting. Tutors at HMT expect to work 2,000 hours a year for which they incur direct labor costs of $24,000. Indirect costs, which are expected to total $6,000, are assigned to clients based on tutors' direct labor hours. Student Miranda Mishugana, in a big panic over her ACCT 2102 exam, hired one of HMT's tutors to work with her for 10 hours the day before the exam. 1. What is the hourly direct labor cost of tutors at HMT? 2. What is the direct labor cost which was traced to Miranda's exam tutoring? 3. What kinds of indirect costs does HMT incur? 4. What is the predetermined indirect cost allocation rate? 5. What is the indirect cost allocated to Miranda's tutoring? 6. How would the allocation of indirect costs change if the allocation base were direct labor cost instead of direct labor hours? 7. What is the total job cost for Miranda's tutoring? 8. Given that HMT requires a profit of 25% above cost, how much did they bill Miranda? 9. How did Miranda do on the exam?

Answer 1

1 Answer terly direct labour cost of tutas of Hoi As follows famula for dired labour cast pa ham is - lobow Total Direct cost of kad noo hars : £ 34cco acoc hours = $ 1a per hour 2 Answer Direct loban cost traced to mirando's eram tutoring is as follows • Totol noof haas werved with Miranda Direct labowo uest per hour $12 persons = 10 hours = $100 Total Direct lobour cost 3. Hat may incus following indirect casts a Build b. Indirect lobos ( Elects.city expenses d. Building neunteunonce etc.

Predetermined indirect cost allocation rote. - Total Indiret cost Total no. of hows expected : $ GoOut 2000 = $ 3 Per hows s. Indirect cost allocated to Miranda tutoring blol mof hours worked & Lost per hour Tot i = loh x $3 Total Indirect : $30 . . cost 6. Answer If Indirect cost allocate based on direct labour cast Insted direct labowa hoia then it would change as followes Indicet cost. Direct lobocar cost Per hour y no. of howns 7 Pinsen Total Fob cost ofor mionda's tutoring of follows = Diret lobous cost t Indirect cost - lohx $12 t 10hx$3 $30 - $150

8 Answer Bill for miranda - Total cost +954. x total cost = $ 150 + 25x150 = $150 + 10 - $150 +$37.5 -$187.5 9 Answer not related to my subject