Accounting

What equation was used to get the answer in requirement 3?

Consulting to control costs.
Requirement 1. Compute Draper's
predetermined overhead (OH) allocation rate for
2018.




Estimated OH costs / Estimated direct labor costs = Predetermined OH allocation rate
$198,000 / $990,000 = 20 %
Requirement 2. Compute the total cost of each job.
First, enter the direct costs for each job. Then enter in the indirect costs and compute the total cost for each job. (Complete all answer boxes. Enter a "0" for any zero balances. Round all currency amounts to the nearest whole dollar.)




Draper Consulting
Estimated Cost of Sal's Trains and Kayla's Cookies Jobs
Sal's Kayla's
Trains Cookies
Direct Costs:
Direct labor
810 hrs. x $180 $145,800
450 hrs. x $180 $81,000
Meal per diem 2,100 450
Travel costs 9,000 0
Total Direct Costs 156,900 81,450
18



Allocated Indirect Costs:
20 % x $145,800 29,160
20 % x $81,000 16,200
Total Cost $186,060 $97,650
Requirement 3. If Draper wants to earn profits equal to 25% of sales revenue, what fee should it charge each of these two clients? (Round your answers to the nearest whole dollar.)
Sal's
Trains:
$ 248,080
Kayla's
Cookies: $ 130,200

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  1. How did you get the $180?

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