=+5-38 KK Service industry, job costing, law firm OBJECTIVE 4 Rudd & Associates is a law firm specialising in labour relations and employee-related work. It employs 25 professionals (5 partners and 20 associates) who work directly with its clients. The average budgeted total compensation per professional is $170000. Each professional is budgeted to have 1650 billable hours to clients in 2015. All professionals work for clients to their maximum 1650 billable hours available. All professional labour costs are included in a single direct cost category and are traced to jobs on a per-hour basis. All costs of Rudd & Associates other than professional labour costs are included in a single indirect cost pool (legal support) and are allocated to jobs using professional labour-hours as the allocation base. The budgeted level of indirect costs in 2015 is $2350000.

Required 1 Prepare an overview diagram of Rudd & Associates’ job-costing system.