Prior to instituting an activity-based costing system, Mason and Hutton, the attorneys in E9-6 and E9-7, utilized a simplified costing system with one direct cost category, professional labor, and one indirect cost category, professional support. The average wage rate for professional labor was $73 per hour, and the overhead rate for professional support was $67.50 per professional labor hour. Compute the job cost for Jim Adams, the client in E9-7, using the simplified costing system, and determine the difference between it and the job cost using activity-based costing in E9-7 and discuss the reasons for the difference.
Answer to relevant QuestionsThe partners of Rozow and Cardis, CPAs, decide to implement an activity-based costing system for their firm. They identify the following three cost pools and budgeted amounts for each for the coming year: fringe benefits, ...Required Based on the cost of quality report that you prepared in P9-12 above, offer suggestions to Pimental Manufacturing Inc. as to how it might improve its quality program Williams and DiMaggio, architects, have been using a simplified costing system in which all professional labor costs are included in a single direct cost category, professional labor; and all overhead costs are included in a ...Alamo Metal Works produces 300,000 units at 80% of its total capacity. Its fixed factory overhead is $2,500,000. Unit contribution margin is as follows: Selling price .................................... $35 Variable costs ...Teton, Inc. sells its only product for $50 per unit. Fixed expenses total $800,000 per year. Variable expenses are $1,000,000 when 40,000 units are sold. How many units must be sold to earn a net operating income of $75,000?
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