(job cost and pricing) Jen Bernardi is an attorney who uses a job order cost¬ ing system to collect costs relative to client engagements. Bernardi is cur¬ rently working on a case for Joe Lundy. During the first three months of 2006, Bernardi logged 105 hours on the Lundy case.
In addition to direct hours spent by Bernardi, her secretary has worked 25 hours typing and copying 1,450 pages of documents related to the Lundy case. Bernardi’s secretary works 160 hours per month and is paid a salary of $3,920 per month. The average cost per copy is $0.04 for paper, toner, and machine rental. Telephone charges for long-distance calls on the case totaled $265.50. Last, Bernardi has estimated that total office overhead for rent, utili¬ ties, parking, and so on, amount to $7,200 per month and that, during a normal month, she is at the office 120 hours.

a. Bernardi desires to earn, at a minimum, $90 per hour, and she wishes to cover all direct and allocated indirect costs related to a case. What minimum charge per hour (rounded to the nearest $10) should Bernardi charge Lundy? (Hint: Be sure to include office overhead.)

b. All the hours that Bernardi spends at the office are not necessarily bill- able hours. In addition, Bernardi did not consider certain other expenses such as license fees, country club dues, automobile costs, and other mis¬ cellaneous expenses when she detemiined the amount of overhead per month. Therefore, to cover nonbillable time as well as other costs, Bernardi desires to bill each client for direct costs plus allocated indirect costs plus 50 percent margin on her time and overhead. What will Bernardi charge Lundy in total for the time spent on his case?LO1.