Harrington asks his assistant to collect details on those costs included in the $ 25,000 indirect-cost pool that can be traced to each individual job. After analysis, Bradley is able to reclassify $ 15,000 of the $ 25,000 as direct costs:

Harrington decides to calculate the costs of each job as if Bradley had used six direct cost-pools and a single indirect-cost pool. The single indirect-cost pool would have $ 10,000 of costs and would be allocated to each case using the professional labor-ours base.

Required
1. Calculate the revised indirect-cost allocation rate per professional labor-hour for Bradley Associates when total indirect costs are $ 10,000.
2. Compute the costs of the Campa and St. Edith’s jobs if Bradley Associates had used its refined costing system with multiple direct-cost categories and one indirect-cost pool.
3. Compare the costs of Campa and St. Edith’s jobs in requirement 2 with those in requirement 2 of Problem 5-30. Comment on theresults.

Transcribed Image Text:

Other Direct Costs Research support labor Computer time Travel and allowances Telephones/faxes Photocopying Total Campa Coal $1,800 400 700 250 300 $3,450 St. Edith's Glass 3850 1,600 4200 1200 700 $11,550