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Compute the firms predetermined overhead rate

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Reference no: EM132382185

Question :

The Meyers CPA firm has the following overhead budget for the year.

Overhead

Indirect materials                   S 310,000

Indirect labor                        1,615,000

Depreciation-Building                               295,000

Depreciation-furniture                  27,000

Utilities                                               290,000

Insurance                                              35,000

Property taxes                                         49,000

Other expenses                                           137.000

Total                                                         S 2.758.000

The firm estimates total direct labor cost for the year to be $1,723,750. 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.

Cargos account
Direct labor 5 2,600
Teller account
Direct labor 5 8,600

Required:

1. Compute the firm's 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.

Reference no: EM132382185

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