Chirac & Partners is a Quebec-based public accounting partnership specializing

Chirac & Partners is a Quebec-based public accounting partnership specializing in audit services. Its job-costing system has a single direct cost category (professional labour) and a single indirect cost pool (audit support, which contains all the costs in the Audit Support Department). Audit support costs are allocated to individual jobs using actual professional labour-hours. Chirac & Partners employs ten professionals who are involved in their auditing services.

Budgeted and actual amounts for 2013 are as follows:

Budget for 2013

Professional labour compensation...... $960,000

Audit support department costs...... $720,000

Professional labour-hours billed to clients....16,000 hours

Actual results for 2013

Audit support department costs...... $744,000

Professional labour-hours billed to clients.... 15,500 hours

Actual professional labour cost rate...... $58 per hour

REQUIRED

1. Identify the direct cost rate per professional labour-hour and the indirect cost rate per professional labour-hour for 2013 under (a) actual costing, (b) normal costing, and (c) variation of normal costing that uses budgeted rates for direct costs.

2. The audit of Pierre & Company done in 2013 was budgeted to take 110 hours of professional labour time. The actual professional labour time on the audit was 120 hours.

Compute the 2013 job cost using (a) actual costing, (b) normal costing, and (c) variation of normal costing that uses budgeted rates for direct costs. Explain any differences in the job cost.

Partnership
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...

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