Avery, Hodge, and Associates provides legal services for its local community. In addition to its regular attorneys, the firm hires some part-time attorneys to handle small cases. Two secretaries assist all part-time attorneys exclusively. In 2013, the firm paid $60,000 for the two secretaries who worked a total of 4,000 hours. Moreover, the firm paid Amy Berg $60 per hour and Henry Canton $50 per hour for their part-time legal services.
In August 2013, Ms. Berg completed a case that took her 60 hours. Mr. Canton finished a case on which he worked 30 hours. The firm also paid a private investigator to uncover relevant facts. The investigation fees cost $1,200 for Ms. Berg’s case and $900 for Mr. Canton’s case. Ms. Berg used 30 hours of secretarial assistance, and Mr. Canton used 40 hours.

a. Identify the direct and indirect costs incurred in each case completed in August 2013.
b. Determine the total cost of each case.
c. In addition to secretaries’ salaries, identify three other indirect costs that may need to be allocated to determine the cost of the cases.

  • CreatedFebruary 07, 2014
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