50.1K

Verified Solution

Link Copied!

Information relating to Geller Inc. follows: (Click the icon to view the company's information.) More info 1. Compute Geller's indirect cost allocation rate. 2. Compute the total costs assigned to the Cherry and Cabone engagements. 3. Compute the operating income from the Cherry and Cabone engagements. First identify the formula used to compute the indirect cost allocation rate, then compute the rate. (Round your answe h) Requirement 2. Compute the total costs assigned to the Cherry and Cabone engagements. (Round your answers to website design and support as well as any of Geller's competitors. Ericson cannot understand how Zeta Systems can undercut Geller's rates and still m a profit. But Zeta Systems is reputed to be very profitable. Second, just yesterday Ericson received a call from client Ray Cabone. Cabone was hapr with the excellent service and reasonable fees Ericson charged him for addir a database-driven job-posting feature to his company's website. Ericson was surprised by Cabone's compliments because this was an unusual job for Gel that required development of complex database management and control applications, and she had felt a little uneasy accepting it. Like most consulting firms, Geller traces direct labour to individual engagements (jobs). Geller allocated indirect costs to engagements using a budgeted rate based on direct labour hours. Ericson is happy with this syster which she has used since she established Geller in 1995. Ericson expects to incur $714,000 of indirect costs this year, and she expe her firm to work 5,800 direct labour hours. Ericson and the other systems consultants earn $355 per hour. Clients are billed at 165% of direct labour cc Last month, Geller's consultants spent 115 hours on Cherry's engagement. 1 also spent 115 hours on Cabone's engagement

Answer & Explanation Solved by verified expert

See Answer