Job costing with two direct cost and two indirect cost categories, law firm (continuation of 4-33). Keating has just completed a review of its job costing system. This review 192 | cuarters included a detailed analysis of how past jobs used the firm’s resources and interviews with personnel about what factors drive the level of indirect costs. Management concluded that a system with two direct cost categories (professional partner labour and professional manager labour) and two indirect cost categories (general support and administration support) would yield more accurate job costs. Budgeted information for 2010 related to the two direct cost categories is as follows:

REQUIRED 1. Compute the 2010 budgeted direct cost rates for

(a) professional partners and

(b) professional managers.
2. Compute the 2010 budgeted indirect cost rates for

(a) general support and

(b) administration support.
3. Compute the budgeted job costs for the Richardson and Punch jobs, given the following information:LO1

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Professional Partner Labour Professional Manager Labour Number of professionals Hours of billable time per professional Total compensation (average per professional) 5 20 1,600 per year $200,000 1,600 per year $80,000 Budgeted information for 2010 relating to the two indirect cost categories is Administration Total costs Cost-allocation base General Support Support $1,800,000 $400,000 Professional Partner labour-hours labour-hours