Timlin Associates is a recently formed law partnership. Timlin Associates operates at capacity and uses a cost-based approach to pricing (billing) each job. Timlin currently uses a simple costing system. (Click the icon to view the data using the simple costing system.) Rachel Hamilton, the managing partner of Timlin Associates, decided to try and further refine the costing system. (Click the icon to view the data.) i (Click the icon to view additional information.) Read the requirements. Requirement 1. Compute the costs of the Lopez Enterprises and Clinical Inc.'s cases using Timlin's further refined system, with multiple direct-cost categories and multiple indirect-cost pools. Begin by determining the formulas you will use to calculate the direct partner cost of the job and the direct associate cost of the job. = Partner direct costs of job = Associate direct costs of job More info Timlin has two classifications of professional staff: partners and associates. Hamilton asks her assistant to examine the relative use of partners and associates on the recent Lopez Enterprises and Clinical Inc. jobs. The Lopez Enterprises job used 1,400 partner-hours and 1,100 associate-hours. The Clinical Inc. job used 1,100 partner-hours and 1,400 associate-hours. Therefore, totals of the two jobs together were 2,500 partner-hours and 2,500 associate-hours. Hamilton decides to examine how using separate direct-cost rates for partners and associates and using separate indirect-cost pools for partners and associates would have affected the costs of the Lopez Enterprises and Clinical Inc. jobs. Indirect costs in each indirect-cost pool would be allocated on the basis of total hours of that category of professional labor. From the total indirect cost-pool of $175,000, $100,000 is attributable to the activities of partners and $75,000 is attributable to the activities of associates. The rates per category of professional labor are as follows: Direct Cost per Category of Professional Labor Hour Partner $ 200 Associate $ 150 Print Done Indirect Cost per Hour $100,000+ 2,500 hours = $40.00 $75,000+2,500 hours = $30.00 - Data table - Hamilton asks her assistant to collect details on those costs included in the $625,000 indirect-cost pool that can be traced to each individual job. After analysis, Timlin is able to reclassify $450,000 of the $625,000 as direct costs: Other Direct Costs Lopez Enterprises Clinical Inc. Research support labor $ 41,000 $ 232,500 Computer time 4,000 31,000 Travel and allowances 14,000 81,000 Telephones/faxes Photocopying 4,500 21,000 6,500 14,500 Total 70,000 $ 380,000 Hamilton decides to calculate the costs of each job as if Timlin had used six direct cost-pools and a single indirect-cost pool. The single indirect-cost pool would have $175,000 of costs and would be allocated to each case using the professional labor-hours base. Print Done Timlin Associates is a recently formed law partnership. Timlin Associates operates at capacity and uses a cost-based approach to pricing (billing) each job. Timlin currently uses a simple costing system. (Click the icon to view the data using the simple costing system.) Rachel Hamilton, the managing partner of Timlin Associates, decided to try and further refine the costing system. (Click the icon to view the data.) (Click the icon to view additional information.) Data table Currently it uses a simple costing system with a single direct-cost 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: Requirement 1. Compute the costs of the Lopez Enterprises and Cl Begin by determining the formulas you will use to calculate the direc Professional labor Lopez Enterprises 2,500 hours Clinical Inc. 2,500 hours Professional labor costs at Timlin Associates are $250 an hour. Indirect costs are allocated to cases at $125 an hour. Total indirect costs in the most recent period were $625,000. Print Done indirect-cost pools