Natasha's Interior Designs has support staff for its professional designers. The two professionals work a total of 1,800 hours each and make $45,000 each per year. The total support budget is $90,000, of which $60,000 is professional support, and $30,000 is general office overhead. A job requiring 30 professional hours should be billed how much for overhead if a simplified costing approach is used and hours are the cost driver?

Question

Quizplus · Accepted Answer

Divide the total overhead incurred of $90,000 by the hours worked by the two professionals, 1,800 hours each, which results in $25 an hour. If a job takes 30 hours, then $25 F1F1F1S1F1F1F10 30 hours = $750.
 11eb16ac_e001_760c_984d_5bb2bcf927ad_TB6154_00 $25 F1F1F1S1F1F1F10 30 hours = $750

Natasha's Interior Designs Has Support Staff for Its Professional Designers