Elite Stationary employs 20 full-time employees and 10 trainees. Direct and indirect costs are applied on a professional labor-hour basis that includes both employee and trainee hours. Following is information for 2018:

How much should a client be billed in a normal costing system when 1,000 professional labor-hours are used?

Question

Elite Stationary employs 20 full-time employees and 10 trainees. Direct and indirect costs are applied on a professional labor-hour basis that includes both employee and trainee hours. Following is information for 2018:

How much should a client be billed in a normal costing system when 1,000 professional labor-hours are used?

Quizplus · Accepted Answer

[($210,000 × 20) + ($40,000 × 10)] / 40,000 × 1,000	= $115,000
+ $300,000 / 20,000 × 1,000	= 15,000
$130,000

Elite Stationary Employs 20 Full-Time Employees and 10 Trainees