1. Consider (a) actual costing, (b) normal costing, and (c) a mixed costing approach, which is a variation from normal costing where budgeted rates for direct costs are used. For each of the costing approaches mentioned, calculate the direct-cost rate and the indirect-cost rate per professional labor-hour for 2019. 2. Koffler Legal & Consulting Services PLLC.'s provided a legal consulting service to Magnolia Cosmetics at 2019. This job was budgeted to take 150 hours of professional labor time to complete. However, the actual professional labor time spent on the job was found to be 160 hours. Considering this information, compute the cost of the consulting service provided to Magnolia Cosmetics using (a) actual costing, (b) normal costing, and (c) the mixed costing approach, which is a variation from normal costing where budgeted rates for direct costs are used. Explain any differences in the job cost.
1. Consider (a) actual costing, (b) normal costing, and (c) a mixed costing approach, which is a variation from normal costing where budgeted rates for direct costs are used. For each of the costing approaches mentioned, calculate the direct-cost rate and the indirect-cost rate per professional labor-hour for 2019. 2. Koffler Legal & Consulting Services PLLC.'s provided a legal consulting service to Magnolia Cosmetics at 2019. This job was budgeted to take 150 hours of professional labor time to complete. However, the actual professional labor time spent on the job was found to be 160 hours. Considering this information, compute the cost of the consulting service provided to Magnolia Cosmetics using (a) actual costing, (b) normal costing, and (c) the mixed costing approach, which is a variation from normal costing where budgeted rates for direct costs are used. Explain any differences in the job cost.
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter9: Cost Accounting For Service Businesses, The Balanced Scorecard, And Quality Costs
Section: Chapter Questions
Problem 8P
Related questions
Question
![3) Koffler Legal & Consulting Services PLLC., provides legal consulting services to
businesses in NYC. They follow a job-costing system with a single direct-cost category
(professional labor costs) and a single indirect-cost pool (legal administration costs).
Actual professional hours are used as allocation base in order to allocate legal
administration costs. Koffler Legal & Consulting Services PLLC., currently has 10
lawyers to perform consulting services. Budgeted and actual amounts for 2019 are as
follows:
Koffler Legal & Consulting Services PLLC.
Budget for 2019
Professional labor costs
Legal administration costs
Professional labor-hours billed to customers
$990,000
$774,000
18,000 hours
Actual Results for 2019
Legal administration costs
$735,000
Professional labor-hours billed to customers
17,500
Actual professional labor cost rate
$59 per hour
1. Consider (a) actual costing, (b) normal costing, and (c) a mixed costing approach,
which is a variation from normal costing where budgeted rates for direct costs are
used. For each of the costing approaches mentioned, calculate the direct-cost rate
and the indirect-cost rate per professional labor-hour for 2019.
2. Koffler Legal & Consulting Services PLLC.'s provided a legal consulting service to
Magnolia Cosmetics at 2019. This job was budgeted to take 150 hours of
professional labor time to complete. However, the actual professional labor time
spent on the job was found to be 160 hours. Considering this information, compute
the cost of the consulting service provided to Magnolia Cosmetics using (a) actual
costing, (b) normal costing, and (c) the mixed costing approach, which is a variation
from normal costing where budgeted rates for direct costs are used. Explain any
differences in the job cost.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa53612cb-8ef6-45ed-bc68-2a77d7128142%2F4105b391-6c3c-4490-8513-e543b6c6fe8d%2Forbahuc_processed.png&w=3840&q=75)
Transcribed Image Text:3) Koffler Legal & Consulting Services PLLC., provides legal consulting services to
businesses in NYC. They follow a job-costing system with a single direct-cost category
(professional labor costs) and a single indirect-cost pool (legal administration costs).
Actual professional hours are used as allocation base in order to allocate legal
administration costs. Koffler Legal & Consulting Services PLLC., currently has 10
lawyers to perform consulting services. Budgeted and actual amounts for 2019 are as
follows:
Koffler Legal & Consulting Services PLLC.
Budget for 2019
Professional labor costs
Legal administration costs
Professional labor-hours billed to customers
$990,000
$774,000
18,000 hours
Actual Results for 2019
Legal administration costs
$735,000
Professional labor-hours billed to customers
17,500
Actual professional labor cost rate
$59 per hour
1. Consider (a) actual costing, (b) normal costing, and (c) a mixed costing approach,
which is a variation from normal costing where budgeted rates for direct costs are
used. For each of the costing approaches mentioned, calculate the direct-cost rate
and the indirect-cost rate per professional labor-hour for 2019.
2. Koffler Legal & Consulting Services PLLC.'s provided a legal consulting service to
Magnolia Cosmetics at 2019. This job was budgeted to take 150 hours of
professional labor time to complete. However, the actual professional labor time
spent on the job was found to be 160 hours. Considering this information, compute
the cost of the consulting service provided to Magnolia Cosmetics using (a) actual
costing, (b) normal costing, and (c) the mixed costing approach, which is a variation
from normal costing where budgeted rates for direct costs are used. Explain any
differences in the job cost.
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
![Principles of Cost Accounting](https://www.bartleby.com/isbn_cover_images/9781305087408/9781305087408_smallCoverImage.gif)
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning
![Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781337912020/9781337912020_smallCoverImage.jpg)
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
![Cornerstones of Cost Management (Cornerstones Ser…](https://www.bartleby.com/isbn_cover_images/9781305970663/9781305970663_smallCoverImage.gif)
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
![Principles of Cost Accounting](https://www.bartleby.com/isbn_cover_images/9781305087408/9781305087408_smallCoverImage.gif)
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning
![Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781337912020/9781337912020_smallCoverImage.jpg)
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
![Cornerstones of Cost Management (Cornerstones Ser…](https://www.bartleby.com/isbn_cover_images/9781305970663/9781305970663_smallCoverImage.gif)
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
![Financial And Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781337902663/9781337902663_smallCoverImage.jpg)
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,
![Managerial Accounting: The Cornerstone of Busines…](https://www.bartleby.com/isbn_cover_images/9781337115773/9781337115773_smallCoverImage.gif)
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
![PAYROLL ACCT., 2019 ED.(LL)-TEXT](https://www.bartleby.com/isbn_cover_images/9781337619783/9781337619783_smallCoverImage.gif)