(Cost accumulation; assigning costs to jobs) The law firm of Taub & Lawson,LLP, currently has four cases in process. Following is information related to those cases as of the end of March 2010:
|
Case #1 |
Case #2 |
Case #3 |
Case #4 |
|
|
Direct material |
$480 |
$8,800 |
$3,700 |
$850 |
|
Direct labor hours ($190 per hour) |
40 |
90 |
70 |
15 |
|
Estimated court hours |
12 |
65 |
120 |
40 |
Taub & Lawson allocates overhead to cases based on a predetermined rate of $150 per estimated court hour.
a. Determine the total cost assigned to each case as of March 31, 2010.
b. Case #3 was completed at the end of April 2010. At that time, $10,100 of direct materials had been used and 174 direct labor hours had been incurred. Of the
DLHs, 72 had been spent in court. Taub & Lawson’s policy is to charge client costs plus 45 percent. What amount will be billed to the client involved in Case #3?