ABC Co, a full-service advertising company, is putting together a proposal to provide advertising for one of its clients. ABC Co estimates that the job will require the following direct labor:
Manager 50 hours at rate of $50 per hour and
Staff 200 hours at rate of $20 per hour.
ABC is estimating that this job will require $5,000 of direct materials.
ABC applies overhead to jobs at a rate of 125% of total direct labor cost.
What is ABC’s estimated cost of this advertising job? Summarize the cost as direct materials, direct labor and factory overhead. You must break this down between direct materials, direct labor, overhead and total estimated cost of the job to receive credit. You must show your work for credit.