Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

Please help with number 4 only. And explain what when wrong if possible. Winder, Knotter, and Nale is a small law firm that has 10

image text in transcribed

image text in transcribed

image text in transcribed

image text in transcribedimage text in transcribedPlease help with number 4 only. And explain what when wrong if possible.

Winder, Knotter, and Nale is a small law firm that has 10 partners and 10 support people. The firm employs a job-order costing system to accumulate costs chargeable to each client, and it is organized into two departmentsthe 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 current year, the firm's management made the following estimates for the year: Department Litigation Research-hours Direct lawyer-hours Materials and supplies Direct lawyer cost Departmental overhead cost Research and Documents 22,000 10,000 $ 22,000 $470,000 $748,000 18,000 $ 7,000 $900,000 $ 270,000 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: materials 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 618-3 was initiated on February 10 and completed on June 30. During this period, the following costs and time were recorded on the case: Department Research and Documents 38 29 Litigation Research-hours Direct lawyer-hours Materials and supplies Direct lawyer cost 62 $ 50 $ 90 $1,305 $3,100 Required: 1. Compute the predetermined overhead rate used during the year in the Research and Documents Department. Compute the rate used in the Litigation Department. Answer is complete and correct. Research & Documents department Litigation department Predetermined Overhead Rate $ 34 per hour 30 % 2. Compute the total overhead cost applied to Case 618-3. Answer is complete and correct. Total overhead cost $ 2,222 3. What is the total cost charged to Case 618-3? Show computations by department and in total for the case. Answer is complete and correct. Department Litigation Total Research & Documents $ 90 $ 50 $ 140 1,305 3,100 4,405 Materials and supplies Direct attorney cost Overhead cost applied Total cost 1,292 930 2,222 $ $ 2,687 $ 4,080 $ 6,767 4. At the end of the year, the firm's records revealed the following actual cost and operating data for all cases handled during the year: Department Litigation Research and Documents Research-hours 24,900 Direct lawyer-hours 9,200 Materials and supplies $ 22,900 Direct lawyer cost $460,000 Departmental overhead cost $809,250 16,800 $ 7,900 $812,000 $ 251,700 Determine the amount of underapplied or overapplied overhead cost in each department for the year. Answer is complete but not entirely correct. X $ 61,250 Research & Documents department Litigation department Underapplied overhead Overapplied overhead x $ 18,300 X

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered 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

Accounting Principles

Authors: Jerry Weygandt, Paul Kimmel, Donald Kieso

12th edition

1119132223, 978-1-119-0944, 1118875052, 978-1119132226, 978-1118875056

Students also viewed these Accounting questions