Question:
(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
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Case #2
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Case #3
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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?