Tierra Plant Services completed a special landscaping job for Choate Company.Tierra uses ABC and has the following predetermined overhead allocation rates:

The Choate project required $1,200 in landscape materials,$700 in direct labor,one design,and 35 plants.
Requirements:
1.What is the total cost of the work done for Choate?
2.If Choate paid $3,900 for the job,what is the operating income or loss?
3.If Tierra desires an operating income of 50% of cost,how much should the company charge for the Choate project?

Question

Tierra Plant Services completed a special landscaping job for Choate Company.Tierra uses ABC and has the following predetermined overhead allocation rates:
  
The Choate project required $1,200 in landscape materials,$700 in direct labor,one design,and 35 plants.
Requirements:
1.What is the total cost of the work done for Choate?
2.If Choate paid $3,900 for the job,what is the operating income or loss?
3.If Tierra desires an operating income of 50% of cost,how much should the company charge for the Choate project?

Quizplus · Accepted Answer

The Answer of Tierra Plant Services completed a special landscaping job for Choate Company.Tierra uses ABC and has the following predetermined overhead allocation rates:
  
The Choate project required $1,200 in landscape materials,$700 in direct labor,one design,and 35 plants.
Requirements:
1.What is the total cost of the work done for Choate?
2.If Choate paid $3,900 for the job,what is the operating income or loss?
3.If Tierra desires an operating income of 50% of cost,how much should the company charge for the Choate project?

Tierra Plant Services Completed a Special Landscaping Job for Choate