Hanley asks his assistant to collect details on those costs included in the $21,000 indirect-cost pool that can be traced to each individual case. After further analysis, Wigan is able to reclassify $14,000 of the $21,000 as direct costs:

Other Direct CostsWidnes CoalSt. Helen's Glass

Research support labour....................$1,600.....................$ 3,400

Computer time...................................500........................1,300

Travel and allowances..........................600........................4,400

Telephones/faxes.................................200.......................1,000

Photocopying....................................250.........................750

Total...........................................$3,150....................$10,850

Hanley decides to calculate the costs of each case had Wigan used six direct-cost pools and a single indirect-cost pool. The single indirect-cost pool would have $9,000 of costs and would be allocated to each case using the professional labour-hours base.

Required

1. What is the revised indirect cost allocation rate per professional labour-hour for Wigan Associates when total indirect costs are $9,000?

2. Compute the costs of the Widnes and St. Helen's cases if Wigan 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 cases in requirement 2 with those in requirement 2 of Problem 5-31. Comment on the results.