To determine the cost of each job, we'll follow these steps for each audit job: Sunland Inc., Carla Vista Inc., and Sandhill Inc. We'll calculate the total cost by adding the direct materials, the auditor labor costs, and the overhead costs. Overhead costs are calculated using the given predetermined overhead rate and the number of auditor hours for each job.
### Step-by-step Solution:
1. Determine Overhead Costs:
- The predetermined overhead rate is [tex]$55 per auditor hour.
2. Calculate the Overhead Cost for Each Job:
- Sunland Inc.
- Auditor hours: 76
- Overhead cost for Sunland = \( 76 \text{ hours} \times \$[/tex]55/\text{hour} = \[tex]$4,180 \)
- Carla Vista Inc.
- Auditor hours: 90
- Overhead cost for Carla Vista = \( 90 \text{ hours} \times \$[/tex]55/\text{hour} = \[tex]$4,950 \)
- Sandhill Inc.
- Auditor hours: 48
- Overhead cost for Sandhill = \( 48 \text{ hours} \times \$[/tex]55/\text{hour} = \[tex]$2,640 \)
3. Calculate the Total Cost for Each Job by Adding Direct Materials, Auditor Labor Costs, and Overhead Costs:
- Sunland Inc.
- Direct materials: $[/tex]610
- Auditor labor costs: [tex]$6,300
- Overhead cost: $[/tex]4,180
- Total cost for Sunland = [tex]\( \$610 + \$6,300 + \$4,180 = \$11,090 \)[/tex]
- Carla Vista Inc.
- Direct materials: [tex]$480
- Auditor labor costs: $[/tex]7,600
- Overhead cost: [tex]$4,950
- Total cost for Carla Vista = \( \$[/tex]480 + \[tex]$7,600 + \$[/tex]4,950 = \[tex]$13,030 \)
- Sandhill Inc.
- Direct materials: $[/tex]300
- Auditor labor costs: [tex]$3,575
- Overhead cost: $[/tex]2,640
- Total cost for Sandhill = [tex]\( \$300 + \$3,575 + \$2,640 = \$6,515 \)[/tex]
### Final Costs:
- Sunland Inc.: [tex]$11,090
- Carla Vista Inc.: $[/tex]13,030
- Sandhill Inc.: $6,515
This completes the detailed computation of the costs for each job.
