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:

Service Business

A type of business that provides intangible products, such as expertise or time, to customers.

Location

The particular place or position where a person or property, especially a business, is situated, influencing factors like accessibility, visibility, and convenience.

Customer

An individual or business that purchases goods or services from a company.

Gross Lease

A rental agreement where the landlord pays for all property charges regularly incurred by the ownership, such as taxes, insurance, and maintenance.