Uses a job order costing system

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Reference no: EM13753349

Drake Consulting uses a job order costing system, in which each client is a different job. Drake assigns direct labor, daily per diem, and travel cost directly to each job. It allocates indirect costs to jobs based on a predetermined overhead allocation rate, computed as a percentage of direct labor cost. At the beginning of 2015, the controller prepared the following budget;

Direct Labor Hours Professionals 5,000 hours

Direct Labor Cost Professional $1,000,000

Support Staff Salaries 100,000

Computer Leases 80,000

Office Supplies 20,000

Office Rent 60,000

In November 2015, Drake served several clients. Records for the two clients appear here:

Owen's Trains Marcia's Cookies

Direct Labor Hours 710 hours 200 hours

Meal per Diem $2,500 $600

Travel Costs $7,000 $0

Requirement 3

Allocate Indirect Cost Owen’s Trains Marcia’s

____% X _______ ________

____% X _______ ______

Total Cost ________ ________

Reference no: EM13753349

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