Question
Hobart, Evans, and Nix is a small law firm that contains 10 partners and 12 support persons. The firm employs a job-order costing system to
Hobart, Evans, and Nix is a small law firm that contains 10 partners and 12 support persons. The firm employs 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: Department Research and Documents Litigation Research-hours 28,000 Direct attorney-hours 10,700 21,100 Legal forms and supplies 19,100 6,100 Direct lawyer cost 537,100 1,074,200 Departmental overhead cost 840,000 322,260 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 lawyer cost. The costs charged to each client are made up of three elements: legal forms and supplies used, direct lawyer 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 16 and completed on May 23. During this period, the following costs and time were recorded on the case: Department Research and Documents Litigation Research-hours 21 Direct attorney-hours 5 91 Legal forms and supplies 80 28 Direct lawyer cost 230 5,800 Compute the total overhead cost applied to case 418-3. (Round your answer to the nearest whole number.) 3. What would be the total cost charged to case 418-3? Show computations by department and in total for the case. (Round your answer(s) to the nearest whole number.)
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