Williams and DiMaggio, architects, have been using a simplified costing system in which all professional labor costs
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$150,000 a year, and four associates who each earn $60,000 per year. Each professional has 1,500 billable hours per year. The professional support is $360,000, which consists of $120,000 of design support and $240,000 of administrative support. Mays' job required 30 hours of partner time and 20 hours of associate time. Ruth's job required 5 hours of partner time and 15 hours of associate time.
Required:
1. Prepare job cost sheets for Mays Products and Ruth's Markets, using a simplified costing system with one direct and one indirect cost pool.
2. Prepare job cost sheets for the two clients, using an activity-based costing system with two direct cost categories, partner labor and associate labor, and two indirect cost categories, design support and staff support. Use professional labor dollars as the cost allocation base for design support and professional labor hours for staff support. (Round rates to two decimal places.)
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Related Book For
Principles of Cost Accounting
ISBN: 978-1305087408
17th edition
Authors: Edward J. Vanderbeck, Maria Mitchell
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