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Hobart, Evans, and Nix is a small law firm that employs 10 partners and 12 support persons. The firm uses a job-order costing system to
Hobart, Evans, and Nix is a small law firm that employs 10 partners and 12 support persons. The firm uses a job-order costing system to accumulate costs chargeable to each client, and it is organized into two departments the Research and Documents Department and the Litigation Department. The firm uses predetermined overhead rates to charge the costs of these departments to its clients. At the beginning of the year, the firm's management made the following estimates for the year Research-hours Direct attorney-hours Legal forms and supplies Direct attorney cost Departmental overhead cost Department Research and Documents Litigation 19,700 8,700 15,600 $17,600 $5,400 $430,100 $800,300 $689,500 $312, 117 The predetermined overhead rate in the Research and Documents Department is based on research-hours, and the rate in the Litigation Department is based on direct attorney cost. The costs charged to each client are made up of three elements: legal forms and supplies used, direct attorney costs incurred, and an applied amount of overhead from each department in which work is performed on the case. Case 418-3 was initiated on February 23 and completed on May 16. During this period, the following costs and time were recorded on the case Department Research and Documents Litigation Research-hours Direct attorney-hours Legal forms and supplies Direct attorney cost 9 $51 45 $28 $1,800 $440 Requirement 1: Compute the predetermined overhead rate used during the year in the Research and Documents Department. Compute the rate used in the Litigation Department. (Omit the "$" and "%" sign in your response.) Research and Documents Departments Litigation Department Predetermined overhead rate per hour % of direct attornev panet Requirement 1: Compute the predetermined overhead rate used during the year in the Research and Documents Department Compute the rate used in the Litigation Department. (Omit the "$" and "%" sign in your response.) $ Research and Documents Department Litigation Department Predetermined overhead rate per hour % of direct attorney cost Requirement 2: Using the rates you computed in Requirement 1 above, compute the total overhead cost applied to Case 418-3. (Omit the "$" sign in your response.) Total overhead cost Requirement 3: What would be the total cost charged to Case 418-3? (Omit the "S" sign in your response.) Department Research and Documents Litigation Total Legal forms and supplies Direct attorney cost Overhead cost applied Total cost Requirement 4: At the end of the year, the firm's records revealed the following actual cost and operating data for all cases handled during the year. Research-hours Direct attomey-hours Legal forms and supplies Direct attorney cost Departmental overhead cost Department Research and Documents Litigation 22,700 8,200 14,800 $19,700 $5,600 $400,200 $724,000 $770,900 $300,800 Documents Litigation Total S Legal forms and supplies Direct attorney cost Overhead cost applied Total cost Requirement 4: At the end of the year, the firm's records revealed the following actual cost and operating data for all cases handled during the year Department Research and Litigation Research-hours Direct attorney-hours Legal forms and supplies Direct attorney cost Departmental overhead cost Documents 22,700 8,200 $19,700 $400,200 $770,900 14,800 $5,600 $724,000 $300,800 Determine the amount of underapplied or overapplied overhead cost in each department for the year (Input all amounts as positive values. Omit the "$" sign in your response.) Research and Documents Litigation (Click to select) (Click to select) overhead overhead $ $ References Worksheet Learning Objective: 08-03 Compute predetermin overhead rates in the costing process
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