FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Winken, Blinken, and Nod is a law firm specializing in real estate litigation. In addition to the three partners, the firm employs nine
associates who work directly with clients. The average budgeted compensation for the twelve professionals is $299,040. Each lawyer
is budgeted at 1,680 billable hours per year. All professional labor costs are included in a single direct cost pool and are traced to jobs
on a per-hour basis. All non-professional labor costs are included in a single overhead cost pool and are allocated to jobs using
professional labor hours as the allocation base. Budgeted overhead costs total $2,016,000. The firm is considering bidding on some
work with a local university. The job is expected to require 190 hours of professional labor.
Required:
a. Compute the budgeted direct cost rate per hour of professional labor.
b. Compute the budgeted (that is, predetermined) overhead cost rate per hour of professional labor.
c. Compute the budgeted cost for the university job.
Round your answers to the nearest whole dollar amount.
a. Budgeted direct cost rate per hour
b. Budgeted overhead cost rate per hour
c. Budgeted cost for the university job
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Transcribed Image Text:Winken, Blinken, and Nod is a law firm specializing in real estate litigation. In addition to the three partners, the firm employs nine associates who work directly with clients. The average budgeted compensation for the twelve professionals is $299,040. Each lawyer is budgeted at 1,680 billable hours per year. All professional labor costs are included in a single direct cost pool and are traced to jobs on a per-hour basis. All non-professional labor costs are included in a single overhead cost pool and are allocated to jobs using professional labor hours as the allocation base. Budgeted overhead costs total $2,016,000. The firm is considering bidding on some work with a local university. The job is expected to require 190 hours of professional labor. Required: a. Compute the budgeted direct cost rate per hour of professional labor. b. Compute the budgeted (that is, predetermined) overhead cost rate per hour of professional labor. c. Compute the budgeted cost for the university job. Round your answers to the nearest whole dollar amount. a. Budgeted direct cost rate per hour b. Budgeted overhead cost rate per hour c. Budgeted cost for the university job
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