Fancher Companyis a management consulting fin· EEB (Click the icon to view the c

Question

Fancher Companyis a management consulting fin· EEB (Click the icon to view the ciies.) company expects to ir ur $102,000 a ndirect costs this year. ndirect costs o e allocate based on the olo ng activmas: (click the icon to view addilicnsl inomalion.) Determine the totel cost of the ocnsulting job end the operstng ncome asmad Begin by selecting the formula to pt the alocated cvehead (CH)t Dete Table Estimated Quantity of Activity Cost sA Allocation Rate Site vira Ei par vi Compute the tolal llocaled overlesd cot ofle j. par paga Allocated Total indirect coets Activity 3ite visits Print Done Mone Info Tolal Nun, cel ulate the lowl wst ofthe ognsuliing ?ob. diract labor casts at S280 per haur. Last montn, Fancher completed a consuling ab fer Cliert 76 and used the fallowing rasources: Allocatlon Base Direl lebw houre isits Page8 Cllent 76 Total cost of job 70 50 Chonse fram any list or enter any number in the input fields and then coontinue t Print Done

Explanation / Answer

Formula :

Allocated cost :

Calculate total cost of job :

Calculate operating income :

Bill to customer = 19600*120% = 23520

Total cost of job = 20890

operating income = 2630

The operating income from consulting job is 2630

Predetermine overhead allocation rate * Actual activity of job = Allocated cost

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