Fogelin Promotional Services Uses a Job Order System for Costing

question 37

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.
In June, Fogelin signed a contract for a Russian ballet performance. They negotiated a price of $6,400 for their services. When the job was complete, Fogelin's records showed that they had logged 36.5 billable hours.
- What was the actual total cost of the job for Fogelin?

• A) $5,475
• B) $2,044
• C) $3,431
• D) $4,906

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Definitions:

Tariff

A tariff is a tax on imports or exports between sovereign states, often used by governments to protect domestic industries from foreign competition or to generate revenue.

Salmon

A species of fish commonly found in the Atlantic and Pacific Oceans, known for its pink to orange flesh.

Smoot-Hawley Tariff

A set of protectionist tariffs enacted in 1930 in the United States, which raised import duties on thousands of goods, contributing to the severity and duration of the Great Depression.

Dumping

The practice of a company selling a product in a foreign market at a price lower than its cost of production or lower than the price in its domestic market.