Homework Answers
| Answer- | ||||
| Budgeted Overhead rate= Activity Cost pool/ Activity cost driver | ||||
| Computation of Budgeted Overhead rate for each of the cost pools- | ||||
| Cost pool | Cost driver | Amount (a) | Cost Driver activity (b) | Overhead rate (a/b) |
| Fringe benefits | Professional labour dollars | $ 4,50,000 | $ 14,60,000 | 30.82% of professional labour dollars |
| Paralegal Support | Partner labor hours | $ 2,50,000 | 4000 | $62.5 per partner labour hour |
| Research Support | Professional labor hours | $ 6,50,000 | 20000 | $32.5 per professional labour hour |
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oartnership, 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 if the
Audit Support Department). Audit support costs are allocated to
individual jobs using actual professional labor hours. Chico
&Partners employs 10 professionals to perform audit services.
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attached.
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Chico & Partners, a Quebec based public accounting
oartnership, 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 if the
Audit Support Department). Audit support costs are allocated to
individual jobs using actual professional labor hours. Chico
&Partners employs 10 professionals to perform audit services.
Budgeted and actual amounts for 2017 are shown in the photo
attached.
1. Compute the direct...
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