Kidman has just completed a review of its job-costing system. This review included a detailed analysis of how past jobs used the firm’s resources and interviews with personnel about what factors drive the level of indirect costs. Management concluded that a system with two direct-cost categories (professional partner labor and professional associate labor) and two indirect-cost categories (general support and secretarial support) would yield more accurate job costs. Budgeted information for 2014 related to the two direct-cost categories is as follows:

Budgeted information for 2014 relating to the two indirect-cost categories is as follows:

Required
1. Compute the 2014 budgeted direct-cost rates for
(a) Professional partners and
(b) Professional associates.
2. Compute the 2014 budgeted indirect-cost rates for
(a) General support
(b) Secretarial support.
3. Compute the budgeted costs for the Richardson and Punch jobs, given the following information:

4. Comment on the results in requirement 3. Why are the job costs different from those computed in Problem 4-32?
5. Would you recommend Kidman & Associates use the job-costing system in Problem 4-32 or the job-costing system in this problem?Explain.

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Professional Partner Laber Number of professionals Hours of billable time per profession Total compensation (average per professional) Professional Associate Labor 25 1,500 per year $75,000 1500 per year $210,000 Total costs Cost-allocation base General Support $2,025,000 Professional labor-hours Secretarial Support $450,000 Partner labor-hours Professional partners Professional associates Richardson, Inc. 48 hours 72 hours Punch, Inc 32 hours 128 hours