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Curties & Company is an architectural firm specializing in home remodeling for private clients and new office buildings for corporate clients.
0%E420A (similar to) Question Help Annika Larson hired Curtis to design her kitchen remodeling. A total of 30 professional hours were incurred on this job. In addition, Larson’s remodeling job required one of the professionals to travel back and forth to her house for a total of Curtis & Company is an architectural firm specializing in home remodeling for private clients and new office buildings for corporate clients. Curtis charges customers at a billing rate equal to 140% of the client’s total job cost. A client’s total job cost is a combination of (1) professional time spent on the client ($69 per 140 miles. The blueprints had to be copied four times because Larson changed hour cost of employing each professional) and (2) operating overhead allocated to the plans several times. In addition, 19 hours of secretarial time were used lining the client’s job. Curtis allocates operating overhead to jobs based on professionalup the subcontractors for the job hours spent on the job. Curtis estimates its five professionals will incur a total of 10,000 professional hours working on client jobs during the year 囲(Click the icon to view the operating cost information.) Read the requirements Requirement 1. Calculate the current indirect cost allocation rate per professional hour. (Round your answer to the nearest cent.) The current indirect cost allocation rate per professional hour is 26.00 Requirement 2. Calculate the total amount that would be billed to Larson given the current costing structure Determine the formula, then calculate the amount that would be billed to Larson given the current costing structure. (Round all amounts to the nearest cent.) Total cost of job x Markup percentage – Amount billed to client 950000 140% 1330000
Expert Answer
Solution for Requirement 1.
Indirect cost allocation rate per professional hour = Total indirect cost/Total professional hours
=260,000/10,000
=$26 per hour
Solution for Requirement 2.
a) Cost of professional time spent = Total hours spent * per hour rate
= 30*69
= 2,070 $
b) Calculation of overheads allocable to Larson
i) transportation rate per mile = total transportation cost/ total miles
= 9,000/15,000
= 0.6$ per mile
ii)Blueprint cost per copy = total cost/ toal blue print
= 36,000/1,000
= 36 $ per copy
iii) Secretarial cost per hour = total cost/total hours
= 215,000/5000
=43 $ per hour
Total indirect cost allocable= (140 miles *0.6) + (4 copies*36) + (19 hours*43)
= 1,045 $
Total amount to be billed to Larson = Total cost of job * Markup percentage
= (Cost of profesional time spent + overheads allocated to clients job) * markup
= (2,070+1,045) * 140%
Total amount to be billed to Larson = 4,361 $
