Budgeted professional labour costs Budgeted support costs Actual professional labour costs Actual support costs Actual total professional hours $ 1,600,000 $ 2,600,000 $ 1,392,000 $ 2,424,000 24,000 hours 1. Compute the direct cost rate and the indirect cost rate per professional labour-hour under the following. a. Actual costing b. Normal costing c. Variation from normal costing that uses budgeted rates for direct costs 2. The will for a rich tycoon, Ari Roos, was very complex and took three lawyers at the firm 500 hours each to prepare. What would be the cost of writing this will under each of the costing methods in requirement 1? Maddius & Gartford (MG) is a law firm that specializes in writing wills. Its job-costing system has one direct cost pool, professional labour, and a single indirect cost pool that includes all supporting costs of running the law office. The support costs are allocated to clients on the basis of professional labour-hours. In addition to the two senior partners at MG, there are six associates who work directly with clients. Each of the eight lawyers is expected to work for approximately 2,500 hours a year. Budgeted and actual costs for 2019 were as follows: (Click the icon to view the budgeted and actual costs.) Required Requirement 1. Compute the direct cost rate and the indirect cost rate per professional labour-hour under the following. a. Actual costing b. Normal costing c. Variation from normal costing that uses budgeted rates for direct costs Begin by identifying the formula to calculate the actual direct cost rate. Actual direct cost rate Identify the formula to calculate the actual indirect cost rate. Actual indirect cost rate Identify the formula to calculate the budgeted indirect cost rate. Budgeted indirect cost rate Identify the formula to calculate the budgeted direct cost rate. Budgeted direct cost rate Compute the direct cost rate and the indirect cost rate per professional labour-hour under the following. (Round your answers to two decimals.) (a) (b) Normal (c) Variation of Actual costing costing normal costing Direct cost rate Indirect cost rate Requirement 2. The will for a rich tycoon, Ari Roos, was very complex and took three lawyers at the firm 500 hours each to prepare. What would be the cost of writing this will under each of the costing methods in requirement 1? Begin by identifying the formulas to calculate the direct and indirect costs under actual costing. (Abbreviation used: qty = quantity.) (a) Actual costing: Direct costs Indirect costs Identify the formulas to calculate the direct and indirect costs under normal costing. (Abbreviation used: qty = quantity.) (b) Normal costing: Direct costs Indirect costs Identify the formulas to calculate the direct and indirect costs under the variation of normal costing. (Abbreviation used: qty = quantity.) (c) Variation of normal costing: Direct costs Indirect costs What would the cost of writing this will be under each of the costing methods in requirement 1? (Round your answer the nearest whole dollar.) (a) (b) (c) Actual Normal Variation of Cost of Roos' will: costing costing normal costing Direct costs Indirect costs Total job costs
