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31 January, 22:53

Thompson company is a consulting firm and applies indirect overhead costs based on billing hours. the firm expects to have $7,700 in indirect costs during the year and bill customers for 700 hours. the cost of direct labor is $60 per hour. thompson company completed a consulting job for joe lock and billed the customer for 20 hours. what was the total cost of the consulting job?

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  1. 31 January, 23:04
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    The total cost of the consulting job = (Indirect cost per hour + Direct cost per hour) * Total hours

    The total cost of the consulting job = ($11 per hour + $60 per hour) * 20 hours

    = $ 71 * 20 = $ 1,420

    Here, the Indirect cost per hour is $ 11 (7,700 / 700)

    Direct cost per hour is $ 60

    And the total number of hours billed is 20
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