A company employs two consultants. Judy specializes in tax consulting and Steve specializes in management consulting. The company expects to incur total overhead costs of $684,000 during the year and applies overhead based on annual salary costs. Judy's annual salary is $285,000, and she is expected to bill 2,000 hours during the year. Steve's annual salary is $142,500, and he is expected to bill 1,500 hours during the year. Required: a. Calculate the predetermined overhead rate. b. Assuming that the hourly billing rate should be set to cover the total cost of services plus a 20% markup, compute the hourly billing rates for Judy and Steve. Complete this question by entering your answers in the tabs below. Required A Required B Calculate the predetermined overhead rate. Predetermined Overhead Rate %

A company employs two consultants. Judy specializes in tax consulting and Steve specializes in management consulting. The company expects to incur total overhead costs of $684,000 during the year and applies overhead based on annual salary costs. Judy's annual salary is $285,000, and she is expected to bill 2,000 hours during the year. Steve's annual salary is $142,500, and he is expected to bill 1,500 hours during the year. Required: a. Calculate the predetermined overhead rate. b. Assuming that the hourly billing rate should be set to cover the total cost of services plus a 20% markup, compute the hourly billing rates for Judy and Steve. Complete this question by entering your answers in the tabs below. Required A Required B Calculate the predetermined overhead rate. Predetermined Overhead Rate %

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter17: Activity Resource Usage Model And Tactical Decision Making

Section: Chapter Questions

Problem 6E: Elliott, Inc., has four salaried clerks to process purchase orders. Each clerk is paid a salary of...

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