Kahn has just completed a review of its job- costing system. This review included a detailed analysis of how past jobs used the firm’s resources and interviews with personnel about what factors drive the level of indirect costs. Management concluded that a system with two direct- cost categories (professional partner labor and professional associate labor) and two indirect- cost categories (general support and secretarial support) would yield more accurate job costs. Budgeted information for 2012 related to the two direct- cost categories is as follows:

Budgeted information for 2012 relating to the two indirect- cost categories is as follows:


4. Comment on the results in requirement
3. Why are the job costs different from those computed in Problem 4- 26?
5. Would you recommend Kahn & Associates use the job- costing system in Problem 4- 26 or the job- costing system in this problem?Explain.

  • CreatedJanuary 15, 2015
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