In June, Robust Engineering Worked on Three Contracts: 1,200 Hours

question 14

Essay

In June, Robust Engineering worked on three contracts: 1,200 hours for Tico Company, 1,100 hours for Navel LLC, and 3,400 hours for Lutron Corp. Robust bills clients at the rate of $150 per hour; labor cost for its engineering staff is $45 per hour. The total number of hours worked in June was 6,000 (any untraced hours are considered overhead), and non-labor overhead costs were $325,000. Overhead is applied to clients at $55 per labor-hour. In addition, Robust had $243,000 in marketing and administrative costs. All transactions are on account. All services were billed.
Required:
a. Determine the cost of each of the three jobs.
b. What is the amount of over- or underapplied overhead?
c. How much operating profit did Robust make in June? Assume the over- or underapplied overhead is not closed out each month.

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Definitions:

Premium

The amount paid for an insurance policy, or the difference between the higher price paid for a bond above its face value.

Discount

A reduction applied to the regular price of goods or services, often to encourage sales.

Par Value

A nominal value or face value assigned to a share of stock by the corporation at the time of issue.

Articles Of Incorporation

These are legal documents filed with a governmental body to legally document the creation of a corporation.