Job Cost Posting Case
	Rebman
This case involves DeLay & Billmore, Ltd., a law firm that provides services to a wide range of clients.
The firm bills its clients based on the amount of professional and paralegal time that is spent on each job. In addition, any out of pocket costs, such as depositions or travel, are charged to the client.
This is a job-shop environment.
December is the first month of the company's business.
Beginning inventories are as follows:
	Unbilled client costs		none
	Unbilled services in process		none
Overhead consists of office rent, support staff costs, research publications, and other office costs needed to be able to complete legal work. It is projected to be $270,000 for the year.
Direct Labor consists of professional and paralegal time. The firm is projecting billable 4,000 billable hours for the year.
OH is to be allocated on the basis of DL hours.
OH is to be posted at the same time that DL is posted.
The professional staff at the present consists of three people, two attorneys and a paralegal. Their names, compensation rate, and billing rates are shown below. The compensation rate is the salary rate paid to the staff person, and the billing rate is the hourly rate that is used to bill this person's time to clients for work performed.
	Name	Position	Compensation Rate per hour	Billing Rate per hour
	Able	Attorney	$95.00	$250.00
	Baker	Attorney	$95.00	$250.00
	Charles	Paralegal	$45.00	$120.00
	Job	Client Name		Case Type
	2016-1	Dewey, Ketchum & Hyde, Inc		professional liability
	2016-2	Norris, Charles (Chuck)		personal injury
	2016-3	Crumbwell, Rita		embezzlement

Requirements.
Step	Points
1	10	Calculate the overhead rate to be used for the year. It is based on $ per billable hour. Show your calculations here.
		Calculation of OH Rate =
		OH Cost total
		Driver
		OH Rate =
2	25	Post the transactions on the Staff Time Sheets and on the Client Costs Register to the Client Job Records. Use the professional staff compensation rate to post labor costs. Use copy and paste -- don't retype. Also, post the overhead costs at this time.
3	15	Compute the balances in unbilled services and client costs at the end of the month for each job. Enter the balances on the Client Job Records.
4	15	Job 2016-1 and 2016-2 were completed during the month. Prepare invoices as of month-end for the client using the Client Invoice form provided. Consider copy-paste from the job cost record, but be sure to get the correct billing rates. Be sure that the invoice looks professional.
5	5	After the above jobs have been billed, what is the balance of unbilled services at month-end? Show below.
		Balance =
6	10	Complete the schedule below and to the right to summarize the costs and revenues from the jobs that were completed during the month. Watch the difference between professional staff labor rates and billing rates. Did the firm earn a profit on these jobs?
7	10	In the space below the schedule of completed jobs, write your comments as to how a job costing system can be applied to a services business. Why is it important for a service-providing firm to use job costing?
8	10	Consider the OH Rate, the professional staff compensation rate, and the billing rate and provide your opinion in the space below as to whether the company's billing rate is too high, too low, or fairly accurate. Do not consider marketing issues, but only the company's cost structure and billing rates.

DeLay & Billmore, Ltd.
Schedule of completed jobs
Month:	December, 2016
Job No.	Client Name		Total Revenues	Total Costs	Profit (Loss)
Comments on profits and the need for a Job Costing System for a services company:
Comments on the company's billing rate: