Question
Q5(4-29)Job costing; actual, normal, and variation from normal costing. Braden Brothers, Inc., is an architecture firm specializing in high-rise buildings. Its job-costing system has a
Q5(4-29)Job costing; actual, normal, and variation from normal costing. Braden Brothers, Inc., is an architecture firm specializing in high-rise buildings. Its job-costing system has a single direct-cost category (architectural labor) and a single indirect-cost pool, which contains all costs of supporting the office. Support costs are allocated to individual jobs using architect labor-hours. Braden Brothers employs 15 architects. Braden Brothers, Inc. Budget for 2010 Architect labor cost $2,880,000 Office support costs $1,728,000 Architect labor-hours billed to clients 32,000 hours Actual results for 2010 Office support costs $1,729,500 Architect labor-hours billed to clients 34,590 hours Actual architect labor cost rate $ 92 per hour 1. Compute the direct-cost rate and the indirect-cost rate per architectural labor-hour for 2010 under (a) actual costing, (b) normal costing, and (c) the over/under allocated indirect cost (office support costs). 2. Braden Brothers architectural sketches for Champ Tower in Houston was budgeted to take 275 hours of architectural labor time. Compute the budgeted cost of the Champ Tower sketches using normal costing.
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