PROBLEM 3-2) Multiple Departments; Overhead Rates: Underapplied or Overapplied Overhead [LO3.05.LOTI Winde, Esotes, and Nale is a small lex fiems that has 10 prens and 10 support people. The firm employa & job order coating em to accumulate costs chargeable to each client and sta organized to the departments the Resease and Documents Department and the Litigation Department. The firm uses predetermined ontoad rates to charge the cost of these departments to its clints. At the beginning of the constant year, the firm's management made ths following cstimates for the year: Department Research and Documents Litigation Research-hours 20.000 Direct lawyer-hours 9,000 16,000 Materials and supplies S 18.000 $ 5.000 Direct lawyer cost $430,000 $800.000 Departmental overhead cost $700,000 $320,000 The predetermined overlead tate in the Research and Document Department is based cried hours, and the rate in the Litigation Depenent is based on direct lenses.com The costs changed to each clients made up of the elementa allalaadsplies and direct lawyer ceas incurred, and an applied out of ovliced from each departmesi hich was performed on the case. Cac 616-3 was initiated on February 10 and completed on June 30. During this period, the following costs and time mere recorded on the case: 183 Department Research and Documents Litigation Research-hours - 18 Direct lawyer-hours 9 42 Materials and supplies $ 50 $ 30 Direct lawyer cost $410 $2,100 Required: 1. Compute the prodctermined whead rate med daring the year in the Research and Documents Department Compute the rate used in the Litigation Department 2. Using the nates you computed in (1) above, compute the total overhead cost applied to Cose 616-3. 3 What is the total cost charged to Che 618-9 Show commentation by department and intonal for the case. 4. At the end of the year, the firm's record covealed the following chal cost and operating data for all cases handled during the year: Department Research and Documents Litigation Research-hours 23,000 Direct lawyer-hours 8,000 15,000 Materials and supplies $ 19,000 $ 6,000 Direct lawyer cost $400,000 $725,000 Departmental overhead cost $770,000 $300,000 Determine the amount of underapplied or overapplied overhead cont in cach department for the year. PROBLEM 3-2) Multiple Departments; Overhead Rates: Underapplied or Overapplied Overhead [LO3.05.LOTI Winde, Esotes, and Nale is a small lex fiems that has 10 prens and 10 support people. The firm employa & job order coating em to accumulate costs chargeable to each client and sta organized to the departments the Resease and Documents Department and the Litigation Department. The firm uses predetermined ontoad rates to charge the cost of these departments to its clints. At the beginning of the constant year, the firm's management made ths following cstimates for the year: Department Research and Documents Litigation Research-hours 20.000 Direct lawyer-hours 9,000 16,000 Materials and supplies S 18.000 $ 5.000 Direct lawyer cost $430,000 $800.000 Departmental overhead cost $700,000 $320,000 The predetermined overlead tate in the Research and Document Department is based cried hours, and the rate in the Litigation Depenent is based on direct lenses.com The costs changed to each clients made up of the elementa allalaadsplies and direct lawyer ceas incurred, and an applied out of ovliced from each departmesi hich was performed on the case. Cac 616-3 was initiated on February 10 and completed on June 30. During this period, the following costs and time mere recorded on the case: 183 Department Research and Documents Litigation Research-hours - 18 Direct lawyer-hours 9 42 Materials and supplies $ 50 $ 30 Direct lawyer cost $410 $2,100 Required: 1. Compute the prodctermined whead rate med daring the year in the Research and Documents Department Compute the rate used in the Litigation Department 2. Using the nates you computed in (1) above, compute the total overhead cost applied to Cose 616-3. 3 What is the total cost charged to Che 618-9 Show commentation by department and intonal for the case. 4. At the end of the year, the firm's record covealed the following chal cost and operating data for all cases handled during the year: Department Research and Documents Litigation Research-hours 23,000 Direct lawyer-hours 8,000 15,000 Materials and supplies $ 19,000 $ 6,000 Direct lawyer cost $400,000 $725,000 Departmental overhead cost $770,000 $300,000 Determine the amount of underapplied or overapplied overhead cont in cach department for the year
