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Prime Personal Trainers is a personal training service in Bankstown for people who want to work out at home. Prime offers two different types of services: Setup and Continuous Improvement. Setup services consist of several home visits by a personal trainer who specialises in determining the proper equipment for each client and helping the client set up a home gym. Continuous Improvement services provide daily, weekly, or biweekly home visits by trainers. Prime's accountant wants to create a job costing system for Setup services. She decides to use direct labour cost as the allocation base for variable overhead costs, and direct labour hours for fixed overhead cost. To estimate normal capacity, she calculates the average direct labour cost over the last several years. She estimates overhead by updating last year's overhead cost with expected increases in rent, supervisor's salaries, and so on. Following are her estimates (given in euros) for the current period. Direct labour hours (based on 250 normal hours per month) Direct labour cost Indirect labour cost Variable overhead (primarily fringe benefits) Fixed overhead (office related costs) 3000 $ 75000 25000 150000 120000 Inventories consist of exercise equipment and supplies that are used by Prime for new clients. The following information summarises operations during the month of October A number of new jobs were begun in October, but only two jobs were completed: job 20 and job 22. Account balances on October 1 Equipment and supplies (raw materials) Client contracts in process (ob 20) Client contracts in process (ob 22) $5000 3500 1 500 Purchases of equipment and supplies: Equipment Supplies Total $54000 500 $54 500 Equipment and supplies requisitioned for clients: Job 20 Job 21 Job 22 Job 23 Other jobs Indirect supplies Total $ 1000 500 4 000 5000 40000 500 $51 000

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