Kinnett & Associates is a law firm specializing in labor relations and employee-related work. It employs 30 professionals (5 partners and 25 associates) who work directly with its clients. Previously the firm accounted for all professional labor cost in a single direct-cost account and all other costs in a single indirect-cost pool. F: (Click the icon to view the cost information and rates under the previous method.) Kinnett has just completed a review of its job-costing system. (Click the icon to view the job-costing review information.) Budgeted information for 2020 related to the two direct-cost categories is as (Click the icon to view the budgeted information.) Read the requirements. Data table Data table The average budgeted total compensation per professional for 2020 is $97,500. Each professional is budgeted to have 1,500 billable hours to clients in 2020. All professionals work for clients to their maximum 1,500 billable hours available. All professional labor costs are included in a single direct-cost category and are traced to jobs on a per-hour basis. All costs of Kinnett & Associates other than professional labor costs are included in a single indirect-cost pool (legal support) and are allocated to jobs using professional labor-hours as the allocation base. The budgeted level of indirect costs in 2020 is $2,475,000 The cost estimates for the Richardson, Inc. job, which requires 80 budgeted hours of professional labor and for the Punch, Inc. job, which requires 140 budgeted hours of professional labor are as follows: Professional Partner Labor Professional Associate Labor Number of professionals 5 25 Hours of billable time per professional 1.500 per year 1,500 per year Total compensation (average per professional) $ 210,000 $ 75,000 Budgeted information for 2020 relating to the two indirect-cost categories is as follows: Direct-costs - Richardson $ 5,200 $ 4,400 Punch 9,100 7,700 General Support $ 2,025,000 Professional labor-hours $ Total costs Cost-allocation base Secretarial Support 450,000 Partner labor-hours Indirect-costs $ 9,600 $ 16,800 Total costs - - X Requirements Print Done More info 1. Compute the 2020 budgeted direct-cost rates for (a) professional partners and (b) professional associates 2. Compute the 2020 budgeted indirect-cost rates for (a) general support and (b) secretarial support. 3. Compute the budgeted costs for the Richardson and Punch jobs, given the following information: Richardson, Inc. Punch, Inc. Professional partners 32 hours 28 hours Professional associates 48 hours 112 hours 4. Comment on the results in requirement 3. Why are the job costs different from those computed using the firm's previous method? 5. Would you recommend Kinnett & Associates use the job-costing system in the previous method or the job-costing system in this problem? Explain. This review included a detailed analysis of how past jobs used the firm's resources and interviews with personnel about what factors drive the level of indirect costs. 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. Requirement 1. Compute the 2014 budgeted direct-cost rates for (a) professional partners and (b) professional associates. Begin by selecting the formula, then enter the amounts to compute both rates. (Abbreviations used: Assoc. = Associate.) Budgeted direct- = cost rate per hour Partner 1 per hour Assoc. / per hour Requirement 2. Compute the 2014 budgeted indirect-cost rates for (a) general support and (b) secretarial support. Begin by selecting the formula, then enter the amounts to compute both rates. (Round your answers to the nearest whole dollar.) Budgeted indirect- cost rate per hour General = per hour Secretarial per hour Requirement 3. Compute the budgeted costs for the Richardson and Punch jobs based upon the hours each job is budgeted to use. Richardson, Inc. Punch, Inc. Direct-costs: Professional partners Professional associates Direct-costs Indirect-costs General support Secretarial support n is than the fir vely a more refined method a more simple method omm job- bs fore are the same in their use of resources differ in their use of resources eth