21) Fogelin Promotional Services uses a job order system for costing and billing promotional services for dance and ballet performances. Fogelin has 4 public relations specialists, plus an office staff. At the beginning of 2012, Fogelin estimated the total cost of salaries and benefits for the public relations specialists at $403,200, and a total of 7,200 billable hours for the year. All remaining office and administrative costs were estimated at $676,800.
In June, Fogelin signed a contract for a Russian ballet performance. They negotiated a price of $6,400 for their services. When the job was complete, Fogelin's records showed that they had logged 36.5 billable hours. What was the actual total cost of the job for Fogelin?
A) $5,475
B) $2,044
C) $3,431
D) $4,906
22) Fogelin Promotional Services uses a job order system for costing and billing promotional services for dance and ballet performances. Fogelin has 4 public relations specialists, plus an office staff. At the beginning of 2012, Fogelin estimated the total cost of salaries and benefits for the public relations specialists at $403,200, and a total of 7,200 billable hours for the year. All remaining office and administrative costs were estimated at $676,800.
In June, Fogelin signed a contract for a Russian ballet performance. They negotiated a price of $6,400 for their services. When the job was complete, Fogelin's records showed that they had logged 36.5 billable hours. What was the amount of gross profit that Fogelin made on the job?
A) $1,494
B) $2,969
C) $925
D) $4,356
23) Fogelin Promotional Services uses a job order system for costing and billing promotional services for dance and ballet performances. Fogelin has 4 public relations specialists, plus an office staff. At the beginning of 2012, Fogelin estimated the total cost of salaries and benefits for the public relations specialists at $403,200, and a total of 7,200 billable hours for the year. All remaining office and administrative costs were estimated at $676,800.
A new client is contracting with Fogelin to promote a ballet tour in the U.S. Fogelin estimates that the job will require 40 billable hours of specialist time. If Fogelin wishes to make a 25% gross profit on the job, what price should Fogelin quote to the client?
A) $2,800
B) $6,000
C) $7,500
D) $4,700
Learning Objective 17-6
1) In a process costing system, each department has its own Work in process account.
2) In a process costing system, conversion costs are normally assumed to be incurred evenly throughout the production process.
3) In a process costing system, direct materials costs are normally assumed to be incurred evenly throughout the production process.
4) In a process costing system, equivalent units must be calculated separately for materials and conversion costs.
5) If there are 500 units in Department 1 Work in process account at the end of the month, and they are 80% complete with respect to conversion costs, they would be accounted for as 400 equivalent units with respect to conversion costs.
6) In a process costing system, calculating the cost per unit is used for a number of purposes. Which of the following is NOT one of those purposes?
A) To set selling prices
B) To manage and control administrative expenses
C) To manage and control production costs
D) To calculate the ending work in process inventory
7) Which of the following best describes the term
equivalent units?
A) Partially completed units counted in terms of the equivalent number of completed units
B) Partially completed units that will be sold as is
C) Different types of units that can be used for the equivalent purpose or length of time as other units
D) Different products that have the same selling price