Groot Promotional Services Uses a Job Order System for Costing

question 156

Multiple Choice

Groot Promotional Services uses a job order system for costing and billing promotional services for dance and ballet performances.Groot has four public relations specialists plus an office staff.At the beginning of the year,Groot estimated the total cost of salaries and benefits for the public relations specialists at $675,000 and a total of 7500 billable hours for the year.All remaining office and administrative costs were estimated at $405,000.The allocation base for office and administrative costs is billable hours.In June,Groot signed a contract for a Russian ballet performance.It estimated the new contract would require 34 hours of specialist time.What is the total cost estimate for this contract?

• A) $1836
• B) $4896
• C) $3060
• D) $1224

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Definitions:

Incentive Pay

Compensation above the base salary offered to employees as a motivation for achieving performance targets.

Piecework Rate Plans

Compensation systems where employees are paid based on the quantity of work produced or tasks completed.

Routine Jobs

Work that involves repetitive tasks following a set procedure or sequence, often with little to no variation in daily activities.