All professional labour compensation is traced directly to clients on a per professional labour-hour basis. A public

All professional labour compensation is traced directly to clients on a per professional labour-hour basis.

 

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A public accounting firm employs 10 full-time professionals who provide services to clients. All professional labour compensation is traced directly to clients on a per professional labour- hour basis. Any other costs are included in a single indirect-cost pool (same as overhead) and allocated to individual clients according to billable professional labour-hours.+ + Operating costs and data for the year included the following: + Overhead (indirect) costs Number of billable professional labour-hours Total professional compensation ↓ + Estimated $1,000,000 40,000 750,000 ↓ 3. Explain why overhead was either underapplied or overapplied. Actual $1,200,000 50,000 750,000 Required:+ ↓ 1. Calculate the amount of overhead cost underapplied or overapplied. + 2. Prepare a summary journal entry to close any underapplied or overapplied overhead cost to a Cost of Services Provided account (similar to Cost of Goods Sold account for a manufacturing company). + A public accounting firm employs 10 full-time professionals who provide services to clients. All professional labour compensation is traced directly to clients on a per professional labour- hour basis. Any other costs are included in a single indirect-cost pool (same as overhead) and allocated to individual clients according to billable professional labour-hours.+ + Operating costs and data for the year included the following: + Overhead (indirect) costs Number of billable professional labour-hours Total professional compensation ↓ + Estimated $1,000,000 40,000 750,000 ↓ 3. Explain why overhead was either underapplied or overapplied. Actual $1,200,000 50,000 750,000 Required:+ ↓ 1. Calculate the amount of overhead cost underapplied or overapplied. + 2. Prepare a summary journal entry to close any underapplied or overapplied overhead cost to a Cost of Services Provided account (similar to Cost of Goods Sold account for a manufacturing company). +