Question
(d) AAC has just completed a review of its job order costing system. This review included a detailed analysis of how past jobs used the
(d) AAC has just completed a review of its job order costing system. This review included a detailed analysis of how past jobs used the company's resources and interviews with personnel about the factors that drive the level of indirect costs. The management concluded that a system with two direct-cost categories (professional partner labor and professional associate labor) and two indirect-cost categories (general support and secretarial support) would yield more accurate job costs. Budgeted information for 2019 related to the two direct-cost categories or pools is as follows: Professional Partner Labor Number of professionals 5 Professional Associate Labor 25 Hours of billable time per professional Total compensation (average per professional) 1,500 per year RM210,000 1,500 per year RM75,000 Budgeted information for 2019 relating to the two indirect-cost categories is as follows: Total costs General Support RM2,025,000 Coat-allocation base Professional labor-hours Secretarial Support RM450,000 Partner labor-hours (i) Determine the 2019 budgeted direct-cost rates for professional partners and professional associates. Show all workings. (2 Marks) (ii) Determine the 2019 budgeted indirect-cost rates for general support and secretarial support. Show all workings. (2 Marks) (iii) Given the following information, determine the budgeted costs for the Raya and Perkasa jobs. Show all workings: (iii) Given the following information, determine the budgeted costs for the Raya and Perkasa jobs. Show all workings: Raya Perkasa Professional partners 48 hours Professional associates 72 hours 32 hours 128 hours (10 Marks) A2 .zt At ole T.S (iv) Discuss on the results in requirement (d)(iii) and (c) above by showing the differences in the costs used by both Raya and Perkasa jobs. Give TWO (2) reasons for the differences. Show all workings. (6 Marks) (v) Would you recommend AAC to use the existing job order costing system prior to the review process or the one after the review process? Give TWO (2) reasons to support your recommendation
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started