Fogelin Promotional Services Uses a Job Order System for Costing

question 43

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 amount of gross profit that Fogelin made on the job?

• A) $1,494
• B) $2,969
• C) $925
• D) $4,356

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Definitions:

Developmental Program

A structured set of activities designed to improve skills, knowledge, or competency in a specific area or field.

Total Sales Revenue

The sum of all income generated by the sales of goods or services by a company before any costs or expenses are deducted.

Expectancy Theory

A motivational theory that suggests an individual's behavior is determined by their expected rewards or outcomes.

Performance Bonus

A supplementary compensation awarded to an employee for achieving or surpassing specific goals.