Fogelin Promotional Services Uses a Job Order System for Costing

question 58

Multiple Choice

Fogelin Promotional Services uses a job order system for costing and billing promotional services for dance and ballet performances. Fogelin has 4 public relations specialists, plus an office staff. At the beginning of 2012, Fogelin estimated the total cost of salaries and benefits for the public relations specialists at $403,200, and a total of 7,200 billable hours for the year. All remaining office and administrative costs were estimated at $676,800.
A new client is contracting with Fogelin to promote a ballet tour in the U.S. Fogelin estimates that the job will require 40 billable hours of specialist time. If Fogelin wishes to make a 25% gross profit on the job, what price should Fogelin quote to the client?

• A) $2,800
• B) $6,000
• C) $7,500
• D) $4,700

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Definitions:

Lake Craft

Boats or vessels designed for navigation and use on lakes.

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A slim, pointed watercraft propelled by a double-bladed paddle, traditionally used for hunting and now also for sport and recreation.

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A buyer who acquires property without knowledge of any existing claims, disputes, or encumbrances against it.