Baptiste Accounting Services expects its accountants to work a total of 31,000 direct labor hours per year.The company's estimated total indirect costs are $150,000.The direct labor rate is $104 per hour.The company uses direct labor hours as the allocation base for indirect costs.If Baptiste performs a job requiring 48 hours of direct labor and bills the client using a standard markup of 40% of costs,calculate the amount of the client's bill.(Round any intermediate calculations to the nearest cent,and your final answer to the nearest dollar.)

Question

Quizplus · Accepted Answer

Step 1: Calculate the predetermined overhead rate
Predetermined overhead rate = Estimated total indirect costs / Estimated total direct labor hours
Predetermined overhead rate = $150,000 / 31,000 hours
Predetermined overhead rate = $4.84 per hour

Step 2: Calculate the total cost of the job
Total cost of the job = Direct labor cost + Indirect cost
Total cost of the job = 48 hours x $104 per hour + 48 hours x $4.84 per hour
Total cost of the job = $5,011.52

Step 3: Calculate the selling price of the job
Selling price of the job = Total cost of the job x Markup percentage
Selling price of the job = $5,011.52 x 1.4
Selling price of the job = $7,015.13

Answer: D) $7314

Baptiste Accounting Services Expects Its Accountants to Work a Total