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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
WB Design, Inc., is a Web site design and consulting firm. The firm uses a job cost system, in which each client is a different “job.” WB Design traces direct labor, licensing costs, and travel cost directly to each job (client). It allocates indirect costs to jobs based on a predetermined indirect cost allocation rate, computed as a percentage of direct labor costs.
At the beginning of 20X7, managing partner Mary Milici prepared the following budget:

In November 20X7, WB Design served several clients. Records for two clients appear here:

Required
1. Compute WB Design’s predetermined indirect cost allocation rate for 20X7.
2. Compute the total cost of each job.
3. If Milici wants to earn profits equal to 20% of sales revenue, how much (what total fee) should she charge each of these two clients?
4. Why does WB Design assign costs to jobs?
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