Problem $2.$ 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 laborhours. Cheney & Partners employs $10$ professionals to perform audit services.

Budgeted and actual amounts for $2014$ are as follows:

$\backslash$table$[[$Budget for $2014,,],[$Professional labor compensation,$$1,000,000,],[$Audit Support department costs,$$741,000,],[\backslash$table$[[$Professional labor$-$hours billed to$],[$clients$]],16,500$ hours,$]]$

$\backslash$table$[[$Actual Result for $2014,,],[$Audit Support department costs,$$745,000,],[$Professional labor$-$hours billed to clients,$$15,600,],[$Actual professional labor cost rate,$$53$ per hours,$]]$

Compute the direct$-$cost rate and the indirect$-$cost rate per professional labor$-$hour for $2014$ 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 $2014$ audit of Pierre & Co$,$ was budgeted to take $170$ hours of professional labor time. The actual professional labor time spent on the audit was $185$ 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.