Requirements

1. Why is it important for Associates to understand the costs associated with individual jobs?

2. Compute the costs of the Enterprises and Inc. jobs using 's simple costing system.

Wakefield Associates is a recently formed law partnership. Katrina Hadlock, the managing partner of Wakefield Associates, has just finished a tense phone call with John Griffin, president of Griffin Enterprises. John strongly complained about the price Wakefield charged for some legal work done for his company. (Click the icon to view additional information) Read the requirements Requirement 1. Why is it important for Wakefield Associates to understand the costs associated with individual jobs? CA Pricing decisions are heavily influenced by reported cost numbers. OB. Operating at or above capacity for the company lowers overall casts to individual jobs. OC. Overstaffing any job would be detrimental to the company's bottom Ine. OD. All of the above. Requirement 2. Compute the costs of the Griffin Enterprises and Comerstone Inc. jobs using Wakefield's simple costing system. (Abbreviation used: prof. = professional.) Begin by determining the formula used to calculate the direct costs for each job. 1 = Direct costs of job More Info Hadlock also received a phone call from its only other client, Cornerstone, Inc., which was very pleased with both the quality of the work and the price charged an its most recent job. Wakefield Associates operates at capacity and uses a cost-based approach to pricing (billing, each job. Currently it uses a simple costing system with a single direct cast category (professional labor hours) and a single indirect cost pool general support). Indirect costs are allocated to cases on the basis of professional labor-hours per case. The job files show the following: Griffin Enterprises Cornerstone Inc. Professional labor 3,100 hours 1,900 hours Professional labor costs at Wakefield Associates are $240 an hour. Indirect costs are allocated to coses at $95 an hour. Total indirect costs in the most recent period were $475,000. Requirements 1. Why is it important for Wakefield Associates to understand the costs associated with individual jobs? 2. Compute the costs of the Griffin Enterprises and Comerstone Inc. jobs using Wakefield's simple costing system