Job costing; actual, normal, and variation of normal costing. Chirac & Partners is a professional labour-hour; Quebec-based public accounting partnership specializing in audit services. Its job costing tl cost i - per % system has a single direct cost category (professional labour) and a single indirect cost pool BIGiessSiOlahtAvOur NOUL (audit support, which contains all the costs in the Audit Support Department). Audit support 186 costs are allocated to individual jobs using actual professional labour-hours. Chirac &

CHAPTER 4 Partners employs ten professionals who are involved in their auditing services.

REQUIRED *
1. Identify the direct cost rate per professional labour-hour and the indirect cost rate per professional labour-hour for 2010 under

(a) actual costing,

(b) normal costing, and () variation of normal costing that uses budgeted rates for direct costs.
2. The audit of Pierre & Company done in 2010 was budgeted to take 110 hours of professional labour time. The actual professional labour time on the audit was 120 hours. Compute the 2010 job cost using

(a) actual costing,

(b) normal costing, and

(c) variation of normal costing that uses budgeted rates for direct costs. Explain any differences in the job cost.LO1

Transcribed Image Text:

Budget for 2010 Professional labour compensation Audit support department costs Professional labour-hours billed to clients Actual results for 2010 Audit support department costs Professional labour-hours billed to clients Actual professional labour cost rate $960,000 $720,000 16,000 hours $744,000 15,500 hours $58 per hour