Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please help Simple costing system data Currently it uses a single direct-cost category (professional labour-hours) and a single indirect-cost pool (general support). Indirect costs are

please help
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
Simple costing system data Currently it uses a single direct-cost category (professional labour-hours) and a single indirect-cost pool (general support). Indirect costs are allocated to cases on the basis of professional labour-hours per case. The case files show the following. Professional labour costs at Vrabel Associates are $76 an hour. Indirect costs are allocated to cases at $100 an hour. Total indirect costs in the most recent period were $20,500. Other direct costs data Hanley asks his assistant to collect details on those costs included in the $20,500 indirect-cost pool that can be traced to each individual case. After further analysis, Vrabel is able to reclassify $12,300 of the $20,500 as direct costs. Hanley decides to calculate the costs of each case had Vrabel used six direct-cost pools and a single indirect-cost pool. The single indirect-cost pool would have $8,200 of costs and would be allocated to each case using the professional labour-hours base. Use of partners and managers on the cases The Widnes case used 35 partner-hours and 75 manager-hours. The St. Helen's case used 50 partner-hours and 45 manager-hours. Hanley decides to examine how the use of separate direct-cost and indirect-cost pools for partners and managers would have affected the costs of the Widnes and St. Helen's cases. Indirect costs in each cost pool would be allocated based on total hours of that category of professional labour. The rates per category of professional labour are as follows. Vrabel Asspciates is a recenty formed law partherstip. Vrabel Associates operates at capachy and uses a cost-based approech to pricing (bilingi each job. Vrabel earently uses a smple conting sythem (Clok the icon fo vew the data uaing the simple costing wytiom) Eliery Hanley, the managing patner of Vrabel Associates, decided to try and turther refine his costing system (Clck the icon to vitw the other direct cests data) Vrabel Associeves has two classileations of prolessional staf-parthers and monagery. Hanley asks his assistant to wamine the relative use of parthers and managers co the racert Widres Coal and St. Helen's cases (Clck the icon so view the sie of parthers and mansgers on the cases) Required Requirement 1. Comptute the costs of the Widnes and St. Helen's cases using Vrabel's further refined system, wth multiple direct-cost catagories and multiple indirect-oost pools Bepn by daterminng the formulas you will use la calculate the cirect partner cost of the case and the direct manager cost of the pob. - Parthar drect conta of cane - Mandee direct ceats of case soses s,chat 25 pue

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

ISE Fundamental Managerial Accounting Concepts

Authors: Thomas P. Edmonds, Christopher Edmonds, Mark A. Edmonds, Philip R. Olds

10th Edition

1265045925, 9781265045920

More Books

Students also viewed these Accounting questions