Walters audio visual inc. offers an incentive stock option plan to its regional managers. on january 1, 2018, options were granted for 20 million $1 par common shares. the exercise price is the market price on the grant date—$6 per share. options cannot be exercised prior to january 1, 2020, and expire december 31, 2024. the fair value of the 20 million options, estimated by an appropriate option pricing model, is $1 per option. required: 1. determine the total compensation cost pertaining to the incentive stock option plan. 2. to 5. prepare the appropriate journal entries to record compensation expense on december 31, 2018 and 2019. prepare the appropriate journal entry to record the exercise of 75% of the options on march 12, 2020, when the market price is $7 per share and the entry on december 31, 2024, when the remaining options that have vested expire.

crow design, inc. is a web site design and consulting firm. the firm uses a job order costing system in which each client is a different job. crow design assigns direct labor, licensing costs, and travel costs directly to each job. it allocates indirect costs to jobs based on a predetermined overhead allocation rate, computed as a percentage of direct labor costs. direct labor hours (professional) 6,250 hours direct labor costs ($1,800,000 support staff salaries ,000 computer ,000 office ,000 office ,000 in november 2012, crow design served several clients. records for two clients appear here: delicious treats mesilla chocolates direct labor 700 hours 100 hours software licensing $ 4,000 $400 travel costs 8,000 1. compute crow design’s direct labor rate and its predetermined indirect cost allocation rate for 2012. 2. compute the total cost of each job. 3. if simone wants to earn profits equal to 50% of service revenue, how much (what fee) should she charge each of these two clients? 4. why does crow design assign costs to jobs?