Question 6 Raiz & Associate is a small law firm that contains 6 partners and 10 support staffs. The firm employs a job-order costing system to accumulate costs chargeable to each client. For costing purpose, it organizes its firm into two departments: the Research and Documents department and the Litigation department. The firm uses predetermined overhead rates to charge the costs of these departments to its client. At the beginning of the year, the management made the following estimates for the year: Research and Document department Litigation department Research hours Direct attorney hours Legal forms and supplies Direct attorney cost 24,000 9,000 18,000 RM16,000 RM5,000 RM450,000 RM900,000 Departmental overhead costs RM840,000 RM360,000 The predetermined overhead rate in the Research and Documents department is based on research hours while the rate in the Litigation department is based on direct attorney costs. The cost charged to each client are made up of three elements: legal forms and supplies used, direct attorney costs incurred, and an applied amount of overhead from each department in which work is performed on the case. Case #678 was initiated on 2 April and completed on 16 August. During this period, the following costs and time were recorded on the case: Research hours Direct attorney hours Legal forms and supplies Direct attorney cost Research and Document department 26 7 RM80 RM350 Litigation department 114 RM40 RM5,700 At the end of the year, the firm's records revealed the following actual costs and operating data for all cases, handled during the year: Research hours Direct attorney hours Legal forms and supplies Direct attorney cost Departmental overhead costs REQUIRED: Research and Document department Litigation department 26,000 8,000 15,000 RM19,000 RM6,000 RM400,000 RM750,000 RM870,000 RM315,000 (a) Compute the predetermined overhead rate for each department. (b) Compute the total overhead assigned to case #678. (4 marks) (3 marks) (c) Compute the total costs charged to case #678. (Show computation by department and in total for the case). (6 marks) (d) Determine the amount of under/overapplied overhead cost in each department for the year. (6 marks) (e) Briefly explain THREE (3) product characteristics that are suitable for a job costing system. (6 marks)