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:

New-product Strategy Development

The process of creating strategies for the designing, creation, and marketing of new products, focusing on identifying market needs and opportunities.

Strategic Marketing Process

The strategic marketing process involves planning marketing strategies to achieve business objectives, including situation analysis, target market identification, setting marketing goals, strategy formulation, and implementation.

Product Protocol Definition

A detailed description of a product’s attributes, including its functionality, features, and performance requirements, guiding its development and marketing.

Idea Generation

The initial stage in the creative process where new concepts or solutions are created for problems or innovative products and services.