Job Costing: actual, normal and variation from normal costing
Michael and Gabitel is a law firm that specialising in writing wills. Its Job-costing system has one direct cost pool, professional labour and a single indirect cost pool that includes all supporting costs of running the law office. The support costs are allocated to clients on the basis of professional labour hours. In addition to the two senior partners at MG. There are six associates who work directly with clients. Each of the eight lawyers is expected to work for approximately 2500 hours per year.
Budgeted and actual cost for 2019 were
Budgeted professional labour costs	$1,100,000
Budgeted support costs	2,000,000
Actual Professional labour costs	1,320,000
Actual support costs	2,400,000
Actual total professional hours	22,000 hours
Required:
Compute the direct cost rate and the indirect cost rate per professional labour hour under:
1. Actual Costing
2. Normal Costing Part B 2 marks Anderson Construction assembles residential homes. In December 2018., Anderson budgets 2019 assembly support costs to be $7,200,000 and 2019 direct labor hours to be 150,000. The 2019 actual assembly support costs were $7,084,000, while the actual direct labour hours were 161,000. Compute A. budget and actual cost