Problem 1 (25 points) You are a consultant that has been asked by a law firm to compare their traditional costing system with an activity based costing system. You have gathered the following information relative to the operations of the firm INFORMATION RELATED TO OPERATIONS OF LAW FIRM Partner Labor Associate Labor Number of attorneys 20 5 Annual billable hours per attorney 2,000 2,000 100,000 Annual compensation per attorney 250,000 S S The annual estimated overhead per activity center is provided below. INFORMATION RELATED TO ESTIMATED OVERHEAD TO EACH ACTIVITY CENTER Secretarial Support Legal Support 2.500,000 S Annual estimated overhead 1,000,000 You are going to analyze two jobs for the firm: the Smith job, which will require 50 partner hours and 20 associate hours; and the Jones job, which will require 15 partner hours and 55 associate hours REQUIRED: ( Using a traditional costing system, determine the following amounts Cost of each job, assuming that overhead is allocated to jobs using (a) total professional labor hours as the activity base. Round your calculations to the nearest whole dollar Amount that should be billed to each customer, assuming that the firm bills customers at a 25% markup on cost. Round your calculations to the nearest whole dollar (b) Using an activity based costing system, determine the following amounts Cost of each job, ass uming that overhead is allocated to jobs by using one rate for legal support using associate labor hours as the activity base and another rate for secretarial support using partner labor hours as the activity base. Round your calculations to the nearest whole dollar Amount that should be billed to each customer, assuming that the firm bills customers at a 25% markup on cost. Round your calculations to the nearest whole dollar. (2) (a) (b)