Job costing; actual, normal, and variation from normal costing. Chico & Partners, a Quebec-based public accounting partnership, specializes in audit services. Its job-costing system has a single direct-cost category (professional labor) and a single indirect-cost pool (audit support, which contains all costs of the Audit Support Department). Audit support costs are allocated to individual jobs using actual professional labor-hours. Chico & Partners employs 10 professionals to perform audit services. Budgeted and actual amounts for 2011 are as follows:

Required1. Compute the direct-cost rate and the indirect-cost rate per professional labor-hour for 2011 under(a) actual costing, (b) normal costing, and (c) the variation from normal costing that uses budgeted rates for direct costs.2. Chico's 2011 audit of Pierre & Co. was budgeted to take 150 hours of professional labor time. The actual professional labor time spent on the audit was 160 hours. Compute the cost of the Pierre & Co. audit using (a) actual costing, (b) normal costing, and (c) the variation from normal costing that uses budgeted rates for direct costs. Explain any differences in the jobcost.

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Chico & Partners Budget for 2011 Professional labor compensation Audit support department costs Professional labor-hours billed to clients $990,000 $774,000 18,000 hours Actual results for 2011 Audit support department costs Professional labor-hours billed to clients Actual professional labor cost rate $735,000 17,500 59 per hour