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 is the cost driver?

Question

Quizplus · Accepted Answer

The total professional hours are 3,600 (1,800 hours per professional x 2). The overhead cost per hour is $30,000 / 3,600 hours = $8.33. For 30 hours, the overhead cost is 30 x $8.33 = $250. However, the question asks for the total cost including support, which is $60,000 / 3,600 = $16.67 per hour. So, for 30 hours, the total cost is 30 x ($8.33 + $16.67) = $750.

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