accounting hmwk Compute Design's predetermined indirect cost allocation rate for 2011.

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Design, Inc., is a web site design and consulting firm. The firm uses a job order costing
system, in which each client is a different job. Widget Design traces direct labor, licensing costs,
and travel costs directly to each job. It allocates indirect costs to jobs based on a predetermined
indirect cost allocation rate, computed as a percentage of direct labor costs.

	At the beginning of 2011, managing partner Judi Johnson prepared the following budget:
	Direct Labor Hours			10,000	hours
	Direct Labor Costs			$ 1,400,000
	Support Staff Salaries			$ 170,000
	Computer Leases			$ 49,000
	Office Supplies			$ 29,000
	Office Rent			$ 60,000



	In November 2011, Widget Design served several clients. Records for two clients appear here:
					Dining Coop		Root Chocolates
	Direct labor hours				740 hours		65	hours
	Software licensing costs				$ 2,100		$ 300
	Travel costs				$ 9,000		$ -




Deliverables

1.	Compute Design's predetermined indirect cost allocation rate for 2011.
2.	Compute the total cost of each job.
3.	If Design's inc wants to earn profits equal to 20% of sales revenue, how much (what fee) should
	it charge each of these two clients?
4.	Why does Widget Design assign costs to jobs?

Deliverable 1
	The predetermined indirect cost allocation rate =


HINT:	Do this with a formula showing indirect costs to total direct labor costs


Deliverable 2
	First enter in the direct costs for each job. Then enter in the indirect costs and total
	costs for the jobs.
	Make sure to enter "0" in the appropriate column. Enter percentage amounts as a whole
	number. Round your answers to the nearest whole dollar.

		Widget Design, Inc.
		Estimated Cost of Dining Coop and Root Chocolates Jobs
					Dining Coop	Root Chocolates
		Direct Costs:
			Direct labor


		Software licensing costs
		Travel
		Total Direct Costs

		Indirect Costs:
					$ -
						$ -
		Total Cost			$ -	$ -


Deliverable 3
	Determine the amount Robin Design, Inc. should charge these clients.
		(Round your answers to the nearest whole dollar.)

	Dining Coop:

	Root Chocolates:

Deliverable 4
	Widget Designs, Inc. assigns costs to jobs to help the company




	Assigning costs to:

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