This problem continues the Haupt Consulting, Inc., situation from Problem 15-36 of Chapt...

This problem continues the Haupt Consulting, Inc., situation from Problem 15-36 of Chapter 15. Haupt Consulting uses a job order costing system, in which each client is a different job. Haupt traces direct labor, daily per diem, and travel costs directly to each job. It allocates indirect costs to jobs based on a predetermined indirect cost allocation rate, computed as a percentage of direct labor costs.

At the beginning of 2010, the controller prepared the following budget:

In November; 2010, Haupt served several clients. Records for two clients appear here:

Requirements

1. Compute Haupt’s predetermined indirect cost allocation rate for 2010.

2. Compute the total cost of each job.

3. If Haupt wants to earn profits equal to 25% of sales revenue, how much (what fee) should it charge each of these two clients?

4. Why does Haupt assign costs to jobs?