Problem:
Job Order Costing in a Service Organization
Personal Shoppers, Inc., relieves busy women executives of the stress of shopping for clothes by taking an inventory of a client's current wardrobe and shopping for her needs for the next season or a special event. The company charges clients $30 per hour for the service plus the cost of the clothes purchased. It pays its employees various hourly wage rates.
During September, Personal Shoppers worked with three clients. It began Job 9-3, for Lucinda Map ley, on September 3, 2011 and completed the job on September 30, 2011. Using the partial data that follow, prepare the job order cost card. What amount of profit will Personal Shoppers make on this job?
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Costs Charged to Job
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Costs
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Hours
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Other
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In-person consultation
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Supplies
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$ 30
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Labor ($10 per hour)
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4
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Overhead (10% of in-person labor costs)
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Shopping
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Purchases
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$560
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Labor ($15 per hour)
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8
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Overhead (25% of shopping labor costs)
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Telephone consultations
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Cell phone calls ($1 per call)
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6 calls
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Labor ($6 per hour)
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2
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Overhead (50% of telephone labor costs)
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