Wigan has two classifications of professional staff: partners and associates. Hanley asks his assistant to examine the relative use of partners and associates on the recent Widnes Coal and St. Helen’s jobs. The Widnes job used 24 partner-hours and 80 associate-hours. The St. Helen’s job used 56 partner-hours and 40 associate-hours. Therefore, totals of the two jobs together were 80 partner hours and 120 associate-hours. Hanley decides to examine how using separate direct-cost rates for partners and associates and using separate indirect-cost pools for partners and associates would have affected the costs of the Widnes and St. Helen’s jobs. Indirect costs in each indirect-cost pool would be allocated on the basis of total hours of that category of professional labor. From the total indirect cost-pool of $7,000, $4,600 is attributable to the activities of partners, and $2,400 is attributable to the activities of associates.

The rates per category of professional labor are as follows:

                                   

Required 
1. Compute the costs of the Widnes and St. Helen’s cases using Wigan’s further refined system, with multiple direct-cost categories and multiple indirect-cost pools.
2. For what decisions might Wigan Associates find it more useful to use this job-costing approach rather than the approaches in Problem 5-29 or 5-30?