Chirac & Partners, a Quebec-based public accounting partnership, specializes in audit services. Its job-costing system has a single direct-cost category(professional labor) and a single in direct-cost pool(audit support, which 

contains 

all costs of the Audit Support Department). Audit support costs are allocated to individual jobs using actual professional labor-hours. Chirac & Partners employs 10 professionals to perform audit services. Budgeted and actual 

amounts for 2017 are asfollows:

 

Chirac & Partners

Budget for 2017

Professional labor compensation $990,000

Audit support department costs $774,000

Professional labor-hours billed to clients 18,000 hours

Actual results for 2017

Audit support department costs $735,000

Professional labor-hours billed to clients 17,500 hours

Actual professional labor cost rate $56 per hour

1. Compute thedirect-cost rate and theindirect-cost rate per professionallabor-hour for 2017 under(a) actualcosting, (b) normalcosting, and(c) the variation from normal costing that uses budgeted rates for direct costs.
2. Whichjob-costing system would you recommend Chirac & Partnersuse? Explain.
3. Chirac 2017 audit of Pierre& Co. was budgeted to take 140 hours of professional labor time. The actual professional labor time spent on the audit was 155 hours. Compute the cost of the Pierre& Co. audit using(a) actualcosting, (b) normalcosting, and(c) the variation from normal costing that uses budgeted rates for direct costs. Explain any differences in the job cost.