Job costing with single direct-cost category, single indirect-cost pool, law firm. (15-20 minutes) Tricheur et Associs is

Job costing with single direct-cost category, single indirect-cost pool, law firm. (15-20 minutes) Tricheur et Associés is a recently formed law partnership. Jean Racine, the managing partner of Tricheur et Associeés, has just finished a tense phone call with Blaise Rascal, president of Morges-Guyére, SARL. Rascal complained about the price Tricheur charged for some conveyancing (drawing up property documents) legal work done for Morges-Guyeére. He requested a breakdown of the charges. He also indicated to Racine that a competing law firm, Andrault & Maque, was seeking more business with Morges-Guyére and that he was going to ask them to bid for a conveyancing job next month. Rascal ended the phone call by saying that if Tricheur bid a price similar to the one charged last month, Tricheur would not be hired for next month’s job.
Racine is dismayed by the phone call. He is also puzzled because he believes that conveyancing is an area where Tricheur et Associés has much expertise and is highly efficient. The Morges-Guyere phone call is the bad news of the week. The good news is that yesterday Racine received a phone call from its only other client (Verrerie de Lausanne)
saying it was very pleased with both the quality of the work (primarily litigation) and the price charged on its most recent case.
Racine decides to collect data on the Morges-Guyere and Verrerie de Lausanne cases. Tricheur et Associés uses a cost-based approach to pricing (billing) each legal case. Currently it uses a single direct-cost category Cor professional labour time) and a single indirect-cost pool (general support). Indirect costs are allocated to cases on the basis of professional labourhours per case. The case files show the following:  lo1

REQUIRED 1. Why is it important for Tricheur et Associés to understand the costs associated with individual cases?
2. Present an overview diagram of the existing job-costing system.
3. Calculate the costs of the Morges-Guyere and Verrerie de Lausanne cases.

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Professional labour time MORGES-GUYRE 104 hours. VERRERIE DE LAUSANNE 96 hours Professional labour costs at Tricheur et Associs are EUR 70 an hour. Indirect costs are allocated to cases at EUR 105 an hour. Total indirect costs in the most recent period were EUR 21,000.