The Meyers CPA firm has the following overhead budget for the year: ...
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Accounting
The Meyers CPA firm has the following overhead budget for the year:
| Overhead | |
|---|---|
| Indirect materials | $ 480,000 |
| Indirect labor | 1,870,000 |
| DepreciationBuilding | 329,000 |
| DepreciationFurniture | 61,000 |
| Utilities | 375,000 |
| Insurance | 52,000 |
| Property taxes | 66,000 |
| Other expenses | 171,000 |
| Total | $ 3,404,000 |
The firm estimates total direct labor cost for the year to be $2,127,500. The firm uses direct labor cost as the cost driver to apply overhead to clients.
During January, the firm worked for many clients; data for two of them follow:
| Gargus account | |
|---|---|
| Direct labor | $ 4,300 |
| Feller account | |
| Direct labor | $ 10,300 |
Required:
1. Compute the firms predetermined overhead rate.
2. Compute the amount of overhead to be charged to the Gargus and Feller accounts using the predetermined overhead rate calculated in requirement 1.
3. Compute total job cost for the Gargus account and the Feller account.
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