2 From requirement 1, we have calculated Actual rate (€) Budgeted rate (€) Direct-cost rate 55 60 Indirect-cost rate 38 40 Hence, the unknowns for Eldorado for 2007–2008 are Actual amounts for 2007–2008 Budgeted amounts for 2007–2008 Consulting labour compensation (€) 1,155,002 1,080,000 Consulting labour-hours (hour) 21,000 18,000 Consulting support costs (€) 798,000 720,000 The road map to compute these amounts is €1,155,000 ↑ €1,080,000 ↑ 21,000 hours g hours g €720,000 4 ← Consulting labour-hours Ag Consulting labour compensation (A) = €1,155,000 (€55 × 21,000 ← ) → Consulting labour compensation (B) = €1,080,000 (€60 × g) ↓ Consulting support costs (B) = €720,000 (€40 × g)
Bhimani, Horngren, Datar and Rajan, Management and Cost Accounting, 5 th Edition, Instructor’s Manual © Pearson Education Limited An overview of the Eldorado job-costing system is Share with your friends: |