=+5-25 KKK Job costing: actual, normal and variation from normal costing OBJECTIVES 3, 5, 6 Chirac & Partners, a Perth-based public accounting partnership, specialises in audit services. Its job-costing system has a single direct cost category (professional labour) 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 labour-hours. Chirac & Partners employs 10 professionals to perform audit services.

Budgeted and actual amounts for 2015 are as follows:

1 2

3 4

5 6

7 8

9 10 A B C Budget for 2015 Professional labour compensation $992 000 Audit support department costs $852 500 Professional labour-hours billed to clients 15 500 hours Actual results for 2015 Audit support department costs $744 000 Professional labour-hours billed to clients 15 000 hours Actual professional labour cost rate $69 per hour Chirac & Partners Required 1 Calculate the direct cost rate and the indirect cost rate per professional labour-hour for 2015 under:

(a) actual costing,

(b) normal costing, and

(c) the variation from normal costing that uses budgeted rates for direct costs.