A professional service firm uses a normal pricing markup on

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Reference no: EM13596745

A professional service firm uses a normal pricing markup on jobs that is 400% of direct professional labor and an overhead application rate that is 150% of direct professional labor. Budgeted operating income on a particular job is $900,000.

Required: Compute the budgeted amount of direct professional labor costs on this job:

The Ernie Company has provided information concerning its 2011 projections as follows:
Net sales $20,000,000
Fixed manufacturing costs 1,800,000
Beginning Inventory $0
Ending inventory $0
Ernie projects variable manufacturing costs of 60% of net sales. (Note-There are no changes in inventories.)

Required: Compute the projected cost of goods sold.

Reference no: EM13596745

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