Design and implement a job costing system

Lawson, Lawson and Son is an accounting firm specializing in taxation and accounting advisory services. it is based in Sydney and has offices in all states and territories throughout Australia.

The firm was established 10 years ago and has 30 professionals (5 partners and 25 associates) who work directly with its clients.

Job-costing information

* The average budgeted total compensation per professional for 2021 is $127,500.

* The budget for each professional anticipates 2,500 chargeable hours to clients in 2021 and all

professionals working for clients to the maximum of 2,500 chargeable to clients.

* All of these costs are included in a single direct-cost category and traced to jobs per hour.

* All costs of Lawson, Lawson and Son, other than direct professional costs are included in a single indirect-

cost pool styled accounting and taxation support and are allocated to jobs using professional hours as the

cost driver.

* The budgeted level of indirect costs in 2021 is $2,395,000.

Required :

1. Develop a worksheet that calculates the following:

a. 2021 budgeted direct-cost rate per hour of professional labor

b. 2021 budgeted indirect-cost rate per hour of professional labor.

2. Develop a worksheet to calculate the costs of the following jobs:

a. Taxation services for Masterton Ltd, for which it budgets 128 professional-hours

b. Accounting advisory service for Bluelight Ltd, for which it budgets 165 professional-hours

c. Taxation and Accounting advisory services for Brownlow, budgeting 112 professional hours for Taxation

and 155 professional hours for Accounting services.