Job costing, peanut-butter costing. (Extension of the Problem for Self-Study) Lindsay and Associates (see pp. 124—126) is examining how the refined costing system in Panel C of Exhibit 4-5 will cost three jobs differently from the costing system outlined in Exhibit 4-3. The following information pertains to the 19 5 audit of these three jobs:

Northern Rooster Nambucca Television King Meat Inc.

Professional partner labor 20 hours 24 hours 58 hours Professional associate labor 140 hours 76 hours 302 hours Office staff labor 12 hours 18 hours 59 hours Information specialist labor 8 hours 28 hours 64 hours Phone/fax/copying S160 $420 S715 Travel

$0 $180 S340 Days out of town 0 days 5 days 8 days Required 1. Use the job costing system in Exhibit 4-3 to cost the 19_5 audits of Northern Television, Rooster King, and Nambucca Meat Inc. Direct and indirect cost rates are reported on p. 102.

2. Use the job costing system in Panel C of Exhibit 4-5 to cost the 195 audits of Northern Tele- vision, Rooster King, and Nambucca Meat Inc. Direct and indirect cost rates are reported in the Problem for Self-Study (pp. 124-126).

3. Using the refined costing system from requirement 2 as the benchmark, which 195 audit jobs are undercosted or overcosted when the Exhibit 4-3 job costing system is used? Explain reasons for this undercosting or overcosting.

4. How might Lindsay and Associates find the refined costing system in requirement 2 to be more useful than the system in requirement 1 in decisions relating to their audit clients Northern Television, Rooster King, and Nambucca Meat?