Refer to S19-12. Assume that Sautter's advertising agents are expected to work a total of 12,000 direct labor hours in 2009. Sautter's estimated total indirect costs are $240,000.

1. What is Sautter's indirect cost allocation rate?

2. What indirect costs will be allocated to client 507 if Tibbs works 14 hours to prepare the magazine ad? 

Exercise S19-12

Complete the following statements with the term job order costing or process costing,

a. ___________ is used by companies that produce small quantities of many

a. different products.

b. Georgia-Pacific pulverizes wood into pulp to manufacture cardboard.

The company uses a ___________ system.

c. To record costs of maintaining thousands of identical mortgage files, financial institutions like Money Tree use a ___________ system.

d. Companies that produce large numbers of identical products use ___________ systems for product costing.

e. The computer repair service that visits your home and repairs your computer uses a ___________ system.