Professional Other Direct Professional Labour Cost Costs Labour Hours
Client 57 $2,000 $800 20
Client 58 1,000 200 10
Client 59 5,000 600 50
Allen's Accounting Services uses job costing and applies overhead using a normal costing system using professional labour hours as the allocation base. This period's estimated overhead cost is $400,000, estimated professional labour cost is $800,000 and estimated direct labour hours are 8,000. This period actual overhead cost was $426,400, actual direct labour cost was $820,000, and actual direct labour hours were 8,200.
What is the total cost for Client 58?

Question

Quizplus · Accepted Answer

To calculate the total cost for Client 58, we need to first determine the overhead rate:

Overhead rate = Estimated overhead cost / Estimated professional labour hours
Overhead rate = $400,000 / 8,000 hours
Overhead rate = $50 per professional labour hour

Using the overhead rate, we can calculate the overhead cost for Client 58:

Overhead cost = Overhead rate x Actual professional labour hours for Client 58
Overhead cost = $50 x 10 hours
Overhead cost = $500

Now, we can calculate the total cost for Client 58:

Total cost = Direct labour cost + Direct other cost + Direct professional labour cost + Overhead cost
Total cost = $200 + $1,000 + $200 + $500
Total cost = $1,900

Therefore, the correct answer is D.