Cheney & Partners Budget for 2017 Professional labor compensation $960,000 Audit support department costs $720,000 Professional...
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Cheney & Partners Budget for 2017 Professional labor compensation $960,000 Audit support department costs $720,000 Professional labor-hours billed to clients 16,000 hours Actual results for 2017 Audit support department costs $744,000 Professional labor-hours billed to clients 15,500 hours Actual professional labor cost rate $53 per hour Requirements 1. Compute the direct-cost rate and the indirect-cost rate per professional labor-hour for 2017 under (a) actual costing, (b) normal costing, and (c) the variation from normal costing that uses budgeted rates for direct costs. 2. Which job-costing system would you recommend Cheney & Partners use? Explain. 3. Cheney's 2017 audit of Pierre & Co. was budgeted to take 150 hours of professional labor time. The actual professional labor time spent on the audit was 165 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. Cheney & Partners Budget for 2017 Professional labor compensation $960,000 Audit support department costs $720,000 Professional labor-hours billed to clients 16,000 hours Actual results for 2017 Audit support department costs $744,000 Professional labor-hours billed to clients 15,500 hours Actual professional labor cost rate $53 per hour Requirements 1. Compute the direct-cost rate and the indirect-cost rate per professional labor-hour for 2017 under (a) actual costing, (b) normal costing, and (c) the variation from normal costing that uses budgeted rates for direct costs. 2. Which job-costing system would you recommend Cheney & Partners use? Explain. 3. Cheney's 2017 audit of Pierre & Co. was budgeted to take 150 hours of professional labor time. The actual professional labor time spent on the audit was 165 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.
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2 Normal costing must be used by Cheney Partners Under normal costing Cheney will be able to use the ... View the full answer
Related Book For
Financial Reporting and Analysis
ISBN: 978-0078025679
6th edition
Authors: Flawrence Revsine, Daniel Collins, Bruce, Mittelstaedt, Leon
Posted Date:
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