=+5-26 KK Job order costing: actual, normal and variation from normal costing OBJECTIVES 4, 5, 6 Zande & Zande (Z&Z) is a law firm that specialises in writing wills. Its job-costing system has one direct cost pool, professional labour and a single indirect cost pool that includes all supporting costs of running the law office. The support costs are allocated to clients on the basis of professional labour-hours. In addition to the two senior partners, Z&Z have six associates who work directly with clients.

Each of the eight lawyers is expected to work for approximately 2650 hours a year.

Budgeted and actual costs for 2015 were:

Budgeted professional labour costs $4 240 000 Budgeted support costs $2 000 000 Actual professional labour costs $4 893 000 Actual support costs $2 400 000 Actual total professional hours 23 300 hours Required 1 Calculate the direct cost rate and the indirect cost rate per professional labour-hour under:

a actual costing Chapter 5: Product and service costing 201 M05_HORN3377_02_LT_C05.indd 201 2/09/13 3:24 PM