Wright Associates is a recently formed law partnership. Wright 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-cost category (professional labor-hours) and a single indirect-cost pool (general support). Indirect costs are allocated to cases on the basis of professional laffor-hours per case. The job files for two of Wright's clients, Graham Enterprises and Tealstone Inc., show the following: (Click the icon to view the data using the simple costing system.) (Click the icon to view additional data.) i Requirements st 1. Calculate the revised indirect-cost allocation rate per professional labor-hour for Wright Associates when total indirect costs are $200,000. 2. Compute the costs of the Graham Enterprises and Tealstone Inc. jobs if Wright Associates had used its refined costing system with multiple direct-cost categories and one indirect-cost pool. 3. Compare the costs of Graham Enterprises and Tealstone Inc. jobs in requirement 2 with those calculated using the simple costing system. Comment on the results. Ansy Print Done hal la gle efd zing uaveuw van viuua. Aner analysis, vnignitis aviv U TELIASSY 1400, VVV OR the $600,000 as direct costs: catio et-co prof. Other Direct Costs Graham Enterprises Tealstone Inc. Research support labor $ ho 35,000 $ 200,300 Computer time 7,000 30,000 Travel and allowances 11,000 75,000 Telephones/faxes 2,500 19,000 6.100 Photocopying 14,100 $ 61,600 $ Total 338,400 Hickman decides to calculate the costs of each job as if Wright had used six direct-cost pools and a single indirect-cost pool. The single indirect-cost pool would have $200,000 of costs and would be allocated to each case using the professional labor-hours base. =ck Ar Det Data Table furrently i hal labor- Ashley Hickman, the managing partner of Wright Associates, asks her assistant to collect details on those costs included in the $600,000 indirect-cost pool that can be traced to each individual job. After analysis, Wright is able to reclassify $400,000 of the $600,000 as direct costs: Other Direct Costs Research support labor Computer time Travel and allowances Telephones/faxes Photocopying prof. = prof Graham Enterprises 35,000 $ 7,000 11,000 2,500 6,100 Tealstone Inc. 200,300 30,000 75.000 19.000 14,100 $ 61,600 $ 338.400 Total Hickman decides to calculate the costs of each job as if Wright had used six Hittannlein internal Thaimele inintenta AN Print Done Wright Associates is a recently formed law partnership. Wright 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-cost category (professional labor-hours) and a single indirect-cost pool (general support). Indirect costs are allocated to cases on the basis of professional laffor-hours per case. The job files for two of Wright's clients, Graham Enterprises and Tealstone Inc., show the following: (Click the icon to view the data using the simple costing system.) (Click the icon to view additional data.) i Requirements st 1. Calculate the revised indirect-cost allocation rate per professional labor-hour for Wright Associates when total indirect costs are $200,000. 2. Compute the costs of the Graham Enterprises and Tealstone Inc. jobs if Wright Associates had used its refined costing system with multiple direct-cost categories and one indirect-cost pool. 3. Compare the costs of Graham Enterprises and Tealstone Inc. jobs in requirement 2 with those calculated using the simple costing system. Comment on the results. Ansy Print Done hal la gle efd zing uaveuw van viuua. Aner analysis, vnignitis aviv U TELIASSY 1400, VVV OR the $600,000 as direct costs: catio et-co prof. Other Direct Costs Graham Enterprises Tealstone Inc. Research support labor $ ho 35,000 $ 200,300 Computer time 7,000 30,000 Travel and allowances 11,000 75,000 Telephones/faxes 2,500 19,000 6.100 Photocopying 14,100 $ 61,600 $ Total 338,400 Hickman decides to calculate the costs of each job as if Wright had used six direct-cost pools and a single indirect-cost pool. The single indirect-cost pool would have $200,000 of costs and would be allocated to each case using the professional labor-hours base. =ck Ar Det Data Table furrently i hal labor- Ashley Hickman, the managing partner of Wright Associates, asks her assistant to collect details on those costs included in the $600,000 indirect-cost pool that can be traced to each individual job. After analysis, Wright is able to reclassify $400,000 of the $600,000 as direct costs: Other Direct Costs Research support labor Computer time Travel and allowances Telephones/faxes Photocopying prof. = prof Graham Enterprises 35,000 $ 7,000 11,000 2,500 6,100 Tealstone Inc. 200,300 30,000 75.000 19.000 14,100 $ 61,600 $ 338.400 Total Hickman decides to calculate the costs of each job as if Wright had used six Hittannlein internal Thaimele inintenta AN Print Done