Empress Accounting Services is considering a special order that it received from

Question

Empress Accounting Services is considering a special order that it received from one of its corporate clients. The special order calls for Empress to prepare the individual tax returns of the corporation's four-largest shareholders. The company has idle capacity that could be used to complete the special order. The following data have been gathered about the preparation of individual tax returns:

Empress Accounting Services would be satisfied with a $45 gross profit per return. Compute the minimum bid price for the entire order.
$

Materials cost per page $1 Average hourly labor rate $57 Standard hours per return 4 Standard pages per return 10 Variable overhead cost per page $0.6 Fixed overhead cost per page $0.6

Explanation / Answer

costs: materials: 4*10*1 = 40 labor: 4*4*57 = 912 VOH: 4*10*0.6 = 24 profit: 4*45 = 180 total 1156 answer: $1156

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