Hanley asks his assistant to collect details on those costs included in the $21,000 indirect-cost pool that can be traced
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 job. After analysis, Wigan is able to reclassify $14,000 of the $21,000 as direct costs:
Hanley decides to calculate the costs of each job as if Wigan had used six direct cost-pools and a single indirect-cost pool. The single indirect-cost pool would have $7,000 of costs and would be allocated to each case using the professional labor-hours base.
2. Compute the costs of the Widnes and St. Helen’s jobs if Wigan Associates had used its refined costing system with multiple direct-cost categories and one indirect-cost pool.
3. Compare the costs of Widnes and St. Helen’s jobs in requirement 2 with those in requirement 2 of Problem 5-29. Comment on the results.
This problem has been solved!
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