Question

Hanley asks his assistant to collect details on those costs included in the $ 25,200 indirect- cost pool that can be traced to each individual job. After analysis, Timlin is able to reclassify $ 18,900 of the $ 25,200 as direct costs:


Hanley 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 $ 6,300 of costs and would be allocated to each case using the professional labor- hours base.

Required
1. What is the revised indirect- cost allocation rate per professional labor- hour for Timlin Associates when total indirect costs are $ 6,300?
2. Compute the costs of the Widnes and St. Helen’s jobs if Timlin Associates had used its refined costing system with multiple direct- cost categories and one indirect- cost pool.
3. Compare the costs of the Widnes and St. Helen’s jobs in requirement 2 with those in requirement 2 in Problem 6- 24. Comment on theresults.


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  • CreatedJanuary 15, 2015
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