Answered step by step
Verified Expert Solution

Q: Keating & Partners is a law firm specializing in labour relations and employee-related work. It employs 25 professionals (5 partners and 20 managers) who work

Keating & Partners is a law firm specializing in labour relations and employee-related work. It employs 25 professionals (5 partners and 20 managers) who work directly with its clients. The average budgeted total compensation per professional for 2016 is $104,000. Each professional is budgeted to have 1,600 billable hours to clients in 2016. Keating is a highly respected firm, and all professionals work for clients to their maximum 1,600 billable hours available. All professional labour costs are included in a single direct cost category and are traced to jobs on a per-hour basis.

All costs of Keating & Partners other than professional labour costs are included in a single indirect cost pool (legal support) and are allocated to jobs using professional labour-hours as the allocation base. The budgeted level of indirect costs in 2016 is $2.2 million.

Required

1. Compute the 2016 budgeted professional labour-hour direct cost rate.

2. Compute the 2016 budgeted indirect cost rate per hour of professional labour.

3. Keating & Partners is considering bidding on two jobs:

a. Litigation work for Richardson Inc. that requires 100 budgeted hours of professional labour.

b. Labour contract work for Punch Inc. that requires 150 budgeted hours of professional labour. Prepare a cost estimate for each job.

Step by Step Solution

3.41 Rating (154 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Link Copied!

Step: 1

1 1040001600 65 per professional labourhour 2 220000025 1600 hours 22... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get a step-by-step solution from a verified subject matter expert – not AI-generated answers

Step: 2Unlock detailed examples and clear explanations to master concepts

blur-text-image_2

Step: 3Unlock to practice, ask and learn with real-world examples

blur-text-image_3

Document Format ( 1 attachment)

Word file Icon

1099-B-C-A-B(2075).docx

120 KBs Word File

See step-by-step solutions with expert insights and AI powered tools for academic success

  • tick Icon Access 30 Million+ textbook solutions.
  • tick Icon Ask unlimited questions from AI Tutors.
  • tick Icon 24/7 Expert guidance tailored to your subject.
  • tick Icon Order free textbooks.

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Cost Accounting A Managerial Emphasis

Authors: Srikant M. Datar, Madhav V. Rajan, Charles T. Horngren, Louis Beaubien, Chris Graham

7th Canadian Edition

133138445, 978-0133926330, 133926338, 978-0133138443

More Books
flashcard-anime

Study Smart with AI Flashcards

Access a vast library of flashcards, create your own, and experience a game-changing transformation in how you learn and retain knowledge

Explore Flashcards

Students Have Also Explored These Related Cost Accounting Questions!

Q:

What do you think?

Answered: 3 weeks ago