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Compute Martin Realtors

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Compute Martin Realtors;Martin Realtors, a real estate consulting firm, specializes in advising companies on potential new plant sites. The company uses a job order costing system with a predetermined indirect cost allocation rate, computed as a percentage of direct labor costs.;At the beginning of 2012, managing partner Andrew Martin prepared the following budget for the year;Direct labor hours (professionals)....... 19,600 hours;Direct labor costs (professionals)........ $ 2,450,000;Office rent............................ 370,000;Support staff salaries.................. 1,282,500;Utilities............................... 430,000;Peters Manufacturing, Inc., is inviting several consultants to bid for work. Andrew Martin estimates that this job will require about 240 direct labor hours.;Requirements;1. Compute Martin Realtors?;(a) Hourly direct labor cost rate and;(b) Indirect cost allocation rate.;2. Compute the predicted cost of the Peters Manufacturing job.;3. If Martin wants to earn a profit that equals 45% of the job?s cost, how much should he bid for the Peters Manufacturing job?

 

Paper#28628 | Written in 18-Jul-2015

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