Tricheur et Associés is a recently formed law partnership. Jean Racine, the managing partner of Tricheur et Associés, has just finished a tense telephone call with Blaise Rascal, president of Morges-Guyère, Sarl. Rascal complained about the price Tricheur charged for some conveyancing legal work done for Morges-Guyère. He requested a breakdown of the charges. He also indicated to Racine that a competing law firm, Andrault & Maque, was seeking more business with Morges-Guyère and that he was going to ask them to bid for a conveyancing job next month. Rascal ended the telephone call by saying that if Tricheur bid a price similar to the one charged last month, Tricheur would not be hired for next month's job.
Racine is dismayed by the telephone call. He is also puzzled because he believes that conveyancing is an area where Tricheur et Associés has much expertise and is highly efficient. The Morges-Guyère telephone call is the bad news of the week. The good news is that yesterday Racine received a call from its only other client (Verrerie de Lausanne) saying it was very pleased with both the quality of the work (primarily litigation) and the price charged on its most recent case. Racine decides to collect data on the Morges-Guyère and Verrerie de Lausanne cases.
Tricheur et Associés uses a cost-based approach to pricing (billing) each legal case. Currently it uses a single direct-cost category (for professional labor time) and a single indirect-cost pool (general support). Indirect costs are allocated to cases on the basis of professional labor-hours per case. The case files show the following:

Professional labor costs at Tricheur et Associés are ‚¬70 an hour. Indirect costs are allocated to cases at ‚¬105 an hour. Total indirect costs in the most recent period were ‚¬21000.
Required
1. Why is it important for Tricheur et Associés to understand the costs associated with individual cases?
2. Present an overview diagram of the existing job-costing system.
3. Calculate the costs of the Morges-Guyère and Verrerie de Lausanne cases.

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Morges-Guyère Verrerie de Lausanne Professional labour time 104 hours 96 hours