Lewis & Associates is a law firm specializing in labor relations and employee-related work. It employs 20 professionals (4 partners and 16 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. E: (Click the icon to view the cost information and rates under the previous method.) Lewis has just completed a review of its job-costing system. (Click the icon to view the job-costing review information.) Budgeted information for 2017 related to the two direct-cost categories is as follows: (Click the icon to view the budgeted information.) Read the requirements. Requirement 1. Compute the Requirements Begin by selecting the formul Budgete Partner Assoc. 1. Compute the 2017 budgeted direct-cost rates for (a) professional partners and (b) professional associates. 2. Compute the 2017 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 30 hours 26 hours Professional associates 45 hours 104 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 Lewis & Associates use the job-costing system in the previous method or the job-costing system in this problem? Explain. Choose from any list or ente ? Print Done parts remaining Check Answer Lewis & Associates is a law firm specializing in labor relations and employee-related work. It employs 20 professionals (4 partners and 16 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. (Click the icon to view the cost information and rates under the previous method.) Lewis has just completed a review of its job-costing system. (Click the icon to view the job-costing review information.) Budgeted information for 2017 related to the two direct-cost categories is as follows: (Click the icon to view the budgeted information.) Read the requirements. Requirement 1 Data Table Begin by selecti Professional Partner Labor Professional Associate Labor Partner Assoc. Number of professionals 4 16 Hours of billable time per professional 1,500 per year 1,500 per year Total compensation (average per $ 180,000 $ 90,000 professional) Budgeted information for 2017 relating to the two indirect-cost categories is as follows: General Support Secretarial Support Total costs $ 1,950,000 $ 300,000 Cost-allocation base Professional labor-hours Partner labor-hours Choose from all Print Done parts remaining inswer Lewis & Associates is a law firm specializing in labor relations and employee-related work. It employs 20 professionals (4 partners and 16 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. (Click the icon to view the cost information and rates under the previous method.) Lewis has just completed a review of its job-costing system. (Click the icon to view the job-costing review information.) Budgeted information for 2017 related to the two direct-cost categories is as follows: (Click the icon to view the budgeted information.) Read the requirements Requirement 1. Compu Data Table Begin by selecting the fo Bud Partner The average budgeted total compensation per professional for 2017 is $108,000. Each professional is budgeted to have 1,500 billable hours to clients in 2017. All professionals work for clients to their maximum 1,500 billable hours available. All professional labor costs are included in single direct-cost category and are traced to jobs on a per-hour basis. All costs of Lewis & 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 2017 is $2,250,000. Assoc. The cost estimates for the Richardson, Inc. job, which requires 75 budgeted hours of professional labor and for the Punch, Inc. job, which requires 130 budgeted hours of professional labor are as follows: Richardson Punch Direct-costs $ 5,400 $ 5,625 9,360 9,750 Choose from any list or Indirect-costs Total costs $ 11,025 $ 19,110 6 parts rmnining Check
