Braty Associates is a recently formed to partnershie Brady Associates operates at capacity and uses a cost based Dara Hickman, the managing partner of Brady Associates, decided to try and therremote conting system aproach to pricing ing each b. Brady currenty se simple conting som then to view the kent viduting the simple cooling Click the land waattino Read the Mequirement. Comte wol we Foster and Rotator income tuther afned when wth mula direct contrairies and routil de opom Bagn By determining the ones you will use to cate the arct carrier cent of the and the aretacciate cost of the No debe tom you will be the costs for and trends Partner costs of Now compute the costs of each job sing te mutile direct cost coragons and die indecto pools, auld your answers to the nearest wideo Foster Enterprises Redstone ine, Directools Per profesor Associate prona March Compare Tel Tel recto Indiurethraas Indirects to partner Indirector of Requirement 2. For at declare might Braty Associates find it more useful to use this jobcoating pproach tother than the opproaches of a simple conting system or a refined coming soom with multiple direct cost categories and one A Better cont control based on individual cores of direct and indirect cont calegories which allows Braty Associates to effectively manage the categories Better employee work icon case projects cause Brasy Asociate wil teatre to start player in assignments they prefer to work on c. Belle manager on client budgets nice brady Assocle can now out out the mid-man work product and efficiently do the work themselves D. Becer client relationships since I will provide a better road map for clients to understand how costs are accumulated at trady Associates DE Belter decisions are made on pricing and product since it will reduce the likelihood of Brady Associates losing cases on which it would have made money i Data Table X Currently it uses a simple costing system with a single direct-cost category (professional labor-hours) and a single indirect-cost pool (general support). Indirect costs are allocated to cases on the basis of professional labor-hours per case. The job files show the following: Foster Enterprises Redstone Inc. Professional labor 2,700 hours 2,300 hours Professional labor costs at Brady Associates are $190 an hour. Indirect costs are allocated to cases at $115 an hour. Total indirect costs in the most recent period were $575,000. Print Done Data Table X Hickman asks her assistant to collect details on those costs included in the $575,000 indirect-cost pool that can be traced to each individual job. After analysis, Brady is able to reclassify $350,000 of the $575,000 as direct costs: Other Direct Costs Foster Enterprises Redstone Inc. Research support labor 38,000 $ 139,800 Computer time 6,000 30,000 Travel and allowances 14,000 79,000 Telephones/faxes 4,000 19,000 Photocopying 6,100 14,100 68,100 $ 281,900 Total Hickman decides to calculate the costs of each job as if Brady had used six direct cost-pools and a single indirect-cost pool. The single indirect-cost pool would have $225,000 of costs and would be allocated to each case using the professional labor-hours base. Print Done * More Info Brady has two classifications of professional staff: partners and associates. Hickman asks her assistant to examine the relative use of partners and associates on the recent Foster Enterprises and Redstone Inc. jobs. The Foster Enterprises job used 1,200 partner-hours and 1,500 associate-hours. The Redstone Inc. job used 1,300 partner-hours and 1,000 associate-hours. Therefore, totals of the two jobs together were 2,500 partner-hours and 2,500 associate-hours. Hickman decides to examine how using separate direct-cost rates for partners and associates and using separate indirect-cost pools for partners and associates would have affected the costs of the Foster Enterprises and Redstone Inc. jobs. Indirect costs in each indirect-cost pool would be allocated on the basis of total hours of that category of professional labor. From the total indirect cost-pool of $225,000, $130,000 is attributable to the activities of partners and $95,000 is attributable to the activities of associates. The rates per category of professional labor are as follows: Direct Cost per Category of Professional Labor Hour Indirect Cost per Hour Partner $ 200 $130,000 + 2,500 hours = $52.00 Associate $ 150 $95,000 + 2,500 hours = $38.00 Print Done Braty Associates is a recently formed to partnershie Brady Associates operates at capacity and uses a cost based Dara Hickman, the managing partner of Brady Associates, decided to try and therremote conting system aproach to pricing ing each b. Brady currenty se simple conting som then to view the kent viduting the simple cooling Click the land waattino Read the Mequirement. Comte wol we Foster and Rotator income tuther afned when wth mula direct contrairies and routil de opom Bagn By determining the ones you will use to cate the arct carrier cent of the and the aretacciate cost of the No debe tom you will be the costs for and trends Partner costs of Now compute the costs of each job sing te mutile direct cost coragons and die indecto pools, auld your answers to the nearest wideo Foster Enterprises Redstone ine, Directools Per profesor Associate prona March Compare Tel Tel recto Indiurethraas Indirects to partner Indirector of Requirement 2. For at declare might Braty Associates find it more useful to use this jobcoating pproach tother than the opproaches of a simple conting system or a refined coming soom with multiple direct cost categories and one A Better cont control based on individual cores of direct and indirect cont calegories which allows Braty Associates to effectively manage the categories Better employee work icon case projects cause Brasy Asociate wil teatre to start player in assignments they prefer to work on c. Belle manager on client budgets nice brady Assocle can now out out the mid-man work product and efficiently do the work themselves D. Becer client relationships since I will provide a better road map for clients to understand how costs are accumulated at trady Associates DE Belter decisions are made on pricing and product since it will reduce the likelihood of Brady Associates losing cases on which it would have made money i Data Table X Currently it uses a simple costing system with a single direct-cost category (professional labor-hours) and a single indirect-cost pool (general support). Indirect costs are allocated to cases on the basis of professional labor-hours per case. The job files show the following: Foster Enterprises Redstone Inc. Professional labor 2,700 hours 2,300 hours Professional labor costs at Brady Associates are $190 an hour. Indirect costs are allocated to cases at $115 an hour. Total indirect costs in the most recent period were $575,000. Print Done Data Table X Hickman asks her assistant to collect details on those costs included in the $575,000 indirect-cost pool that can be traced to each individual job. After analysis, Brady is able to reclassify $350,000 of the $575,000 as direct costs: Other Direct Costs Foster Enterprises Redstone Inc. Research support labor 38,000 $ 139,800 Computer time 6,000 30,000 Travel and allowances 14,000 79,000 Telephones/faxes 4,000 19,000 Photocopying 6,100 14,100 68,100 $ 281,900 Total Hickman decides to calculate the costs of each job as if Brady had used six direct cost-pools and a single indirect-cost pool. The single indirect-cost pool would have $225,000 of costs and would be allocated to each case using the professional labor-hours base. Print Done * More Info Brady has two classifications of professional staff: partners and associates. Hickman asks her assistant to examine the relative use of partners and associates on the recent Foster Enterprises and Redstone Inc. jobs. The Foster Enterprises job used 1,200 partner-hours and 1,500 associate-hours. The Redstone Inc. job used 1,300 partner-hours and 1,000 associate-hours. Therefore, totals of the two jobs together were 2,500 partner-hours and 2,500 associate-hours. Hickman decides to examine how using separate direct-cost rates for partners and associates and using separate indirect-cost pools for partners and associates would have affected the costs of the Foster Enterprises and Redstone Inc. jobs. Indirect costs in each indirect-cost pool would be allocated on the basis of total hours of that category of professional labor. From the total indirect cost-pool of $225,000, $130,000 is attributable to the activities of partners and $95,000 is attributable to the activities of associates. The rates per category of professional labor are as follows: Direct Cost per Category of Professional Labor Hour Indirect Cost per Hour Partner $ 200 $130,000 + 2,500 hours = $52.00 Associate $ 150 $95,000 + 2,500 hours = $38.00 Print Done