Question: Prior to instituting an activity-based costing system, Harris and Whelan, the attorneys in E9-5 and E9-6, utilized a simplified costing system with one direct cost

Prior to instituting an activity-based costing system, Harris and Whelan, the attorneys in E9-5 and E9-6, utilized a simplified costing system with one direct cost category, professional labor, and one indirect cost category, professional support. The average wage rate for professional labor was $75 per hour, and the overhead rate for professional support was $67.50 per professional labor hour.

Compute the job cost for Carolyn Goode, the client in E9-6, using the simplified costing system, and determine the difference between it and the job cost using activity-based costing in E9-6 and discuss the reasons for the difference.

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