Job costing, law firm. Keating & Associates is a law firm specializing in labor relations and employee-related work. It has 25 professionals who work directly with its clients (3 partners and 20 associates). The average budgeted total compensation per professio tal for 19 t1 i>

$104,000. Each professional is budgeted to have 1,600 billable hours to clients ir 196. Keating is a highly respected firm, and all professionals work for clients to their maxi num 1,600 bill- able hours available. All professional labor costs are included in a single direct cost category and are traced to jobs on a per-hour basis. All costs of Keating & Associates other than professional labor cost are included in a single indirect cost pool (legal support) and are allocated to jobs using professional labor- hours as the allocation base. The budgeted level of indirect costs in 19 6 i , $2,200,000.

Required 1. Present an overviev 1 agram of Keating's job costing system.

2. Compute the 196 budgeted professional labor-hour direct cost rate.

3. Compute the 19_6 budg ed indirect cost rate per hour of profc ssional labor.

4. Keating & Associate? is considering bidding on two jobs:

a. Litigation work lor Richardson Inc. that requires 100 budge d hours o\ prot sional ' bor

b. Labor contract work for Punch Inc. that requires 150 budgeted hours of professional labor Prepare a cost estimate for each job.