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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