Cheney & Partners, a Quebec$-$based public accounting partnership, specializes in audit services. Its job$-$costing system has a single direct$-$cost category $($professional labor$)$ and a single indirect$-$cost pool $($audit support,

which contains all costs of the Audit Support Department$).$ Audit support costs are allocated to individual jobs using actual professional labor$-$hours. Cheney & Partners employs $10$ professionals to perform audit services.

Budgeted and actual amounts for $2020$ are as follows:

$($Click the icon to view the data.$)$

Read the requirements. Data table Requirements

Compute the direct$-$cost rate and the indirect$-$cost rate per

professional labor$-$hour for $2020$ under $($a$)$ actual costing, $($b$)$ normal costing,

and $($c$)$ the variation from normal costing that uses budgeted rates for direct

costs.

Which job$-$costing system would you recommend Cheney & Partners use?

Explain.

Cheney's $2020$ audit of Pierre & Co$.$ was budgeted to take $160$ hours of

professional labor time. The actual professional labor time spent on the audit

was $175$ hours. Compute the cost of the Pierre & Co$.$ audit using $($a$)$

actual costing, $($b$)$ normal costing, and $($c$)$ the variation from normal costing

that uses budgeted rates for direct costs. Explain any differences in the job

cost$.$