13-41 Nonprofit Job Costing Job-order costing is usually identified with manufacturing companies. However, service industries and nonprofit organizations also use the method. Suppose a social service agency has a cost accounting system that tracks cost by department (e.g., family counseling, general welfare, and foster children) and by case. In this way, Hillary Pratt, the manager of the agency, is better able to determine how its limited resources (mostly professional social workers) should be allocated Furthermore, the manager's interactions with superiors and various politicians are more fruitful when she can cite the costs of various types of cases. The condensed line-item budget for the general welfare department of the agency last year showed: Professional salaries Level 12 5 @ $75,000 = $375,000 Level 10 19 @ $52,000 = 988,000 Level 8 28 @ $35,000 = 980,000 $2,343,000 Other costs 759.000 Total costs $3,102,000 For costing various cases, the manager favored using a single overhead application rate based on the ratio of total overhead to direct labor. The latter was defined as those professional salaries assigned to specific cases. The professional workers filled out a weekly "case time" report, which approximated the hours spent for each case. The instructions on the report were as follows: "Indicate how much time (in hours) you spent on each case. Unassigned time should be listed separately." About 20% of available time was unassigned to specific cases. It was used for professional development (e.g., continuing education programs). "Unassigned time" became a part of "overhead," as distinguished from the direct labor. Required 1. Compute the "OH" rate as a percentage of direct labor (i.e., the assignable professional salaries). Submit Answer Tries 0/99 2. Suppose that last week a welfare case, Client No. 537, required two hours of Level 12 time, four hours of Level 10 time, and nine hours of Level 8 time. How much job cost should be allocated to Client No, 537 for the week? Assume that all professional employees work a 1,800-hour year. Submit Answer Tries 0/99