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Author Question: Kiji.ca is an internet advertising agency. The firm uses a job cost system in which each client is ... (Read 39 times)

daltonest1984

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Kiji.ca is an internet advertising agency. The firm uses a job cost system in which each client is a
different "job." Kiji.ca traces direct labour, software licensing costs, and travel costs directly to each client (job). The company allocates the indirect costs to jobs based on a predetermined indirect cost allocation rate based on direct labour hours.

At the beginning of the current year, managing partner, Sylvia Long prepared a budget:

Direct labour hours (Professional)35,000 hours
Direct labour cost ( Professional)$3,500,000
Support staff salaries610,000
Rent and utilities190,000
Supplies30,000
Lease payments on computer hardware570,000

During February of the current year, Kiji.ca served several clients. Records for two clients appear here:

GoneAway.comVacationHomes.com
Direct labour hours820 hours64 hours
Software licensing costs$2,980$560
Travel costs$18,000$0

Requirements:
1. Compute Kiji.ca's predetermined indirect cost allocation rate for the current year based on
direct labour hours.
2. Compute the total cost on each job.
3. If Kiji.ca wants to earn profits equal to 20% of total cost, then how much (what total fee) should
it charge each of these clients?


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Marked as best answer by daltonest1984 on Jan 4, 2020

Melissahxx

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daltonest1984

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Reply 2 on: Jan 4, 2020
Thanks for the timely response, appreciate it


cpetit11

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Reply 3 on: Yesterday
Wow, this really help

 

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