Demonstrate calculations

the remaining.

1.5 Job Costing - Chapter 5 The managing partner of Ace Accounting is considering the desirability of tracing more costs to jobs than just direct labour. In this way, the firm will be able to justify billings to clients. Costs for the prior year (2021) were: The following costs were induded in overhead The firm's data processing techniques now make it feasible to document and trace these costs to sox audit engagements. Two job records showed the following: Engagement Required: a) Compute the overhead application rate based on last year's (2021) costs. b) Suppose last year's (2021) costs were reclassificd so that the $3 million would be regarded as direct costs instead of overhead. Compute the overhead application rate as a percentage of direct labour and total direct costs. c) Using the three rates computed in requirements a) and b), compute the total costs of the engagements for Smith Company and Metro Bank. d) Suppose that client billing was based on 30 percent markup of total job costs. Compute the billings that would be forthcoming in requirement c). e) Which method of job costing and overhead application do you favour? Explain. 1.5 Job Costing - Chapter 5 The managing partner of Ace Accounting is considering the desirability of tracing more costs to jobs than just direct labour. In this way, the firm will be able to justify billings to clients. Costs for the prior year (2021) were: The following costs were induded in overhead The firm's data processing techniques now make it feasible to document and trace these costs to sox audit engagements. Two job records showed the following: Engagement Required: a) Compute the overhead application rate based on last year's (2021) costs. b) Suppose last year's (2021) costs were reclassificd so that the $3 million would be regarded as direct costs instead of overhead. Compute the overhead application rate as a percentage of direct labour and total direct costs. c) Using the three rates computed in requirements a) and b), compute the total costs of the engagements for Smith Company and Metro Bank. d) Suppose that client billing was based on 30 percent markup of total job costs. Compute the billings that would be forthcoming in requirement c). e) Which method of job costing and overhead application do you favour? Explain