Hanley asks his assistant to collect details on those costs included in the $ 25,200 indirect- cost pool that can be traced to each individual job. After analysis, Timlin is able to reclassify $ 18,900 of the $ 25,200 as direct costs:

Hanley decides to calculate the costs of each job as if Timlin had used six direct cost- pools and a single indirect-cost pool. The single indirect- cost pool would have $ 6,300 of costs and would be allocated to each case using the professional labor- hours base.

Required
1. What is the revised indirect- cost allocation rate per professional labor- hour for Timlin Associates when total indirect costs are $ 6,300?
2. Compute the costs of the Widnes and St. Helen’s jobs if Timlin Associates had used its refined costing system with multiple direct- cost categories and one indirect- cost pool.
3. Compare the costs of the Widnes and St. Helen’s jobs in requirement 2 with those in requirement 2 in Problem 6- 24. Comment on theresults.

Transcribed Image Text:

Other Direct Costs Widnes Coal St. Helen's Glass Research support labor Computer time Travel and allowances Telephones/faxes Photocopying Total $1,900 750 700 300 250 $3,900 6,850 1,600 4,500 1,300 750 $15,000