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. 3) Koffler Legal & Consulting Services PLLC., provides legal consulting services tobusinesses 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 legaladministration costs. Koffler Legal & Consulting Services PLLC. Currently has 10 lawyersto perform consulting services. Budgeted and actual amounts for 2019 are as follows:Koffler Legal & Consulting Services PLLC.Budget for 2019$990,000$774,00018,000 hoursProfessional labor costsLegal administration costsProfessional labor-hours billed to customersActual Results for 2019Legal administration costs$735,000Professional labor-hours billed to customers17,500Actual professional labor cost rate$59 per hour1. Consider (a) actual costing, (b) normal costing, and (c) a mixed costing approach, avariation from normal costing where budgeted rates are used to calculate direct costs. Foreach of the costing approaches mentioned, calculate the direct-cost rate and the indirect-costrate per professional labor-hour for 2019.2. Koffler Legal & Consulting Services PLLC.'s provided a consulting service to MagnoliaCosmetics at 2019. This job was budgeted to take 150 hours of professional labor time tocomplete. However, the actual professional labor time spent on the job was found to be 160hours. Considering this information, compute the cost of the consulting service provided toMagnolia Cosmetics using (a) actual costing, (b) normal costing, and (c) the mixed costingapproach, a variation from normal costing where budgeted rates are used to calculate directcosts. Explain any differences in the job cost.

Variance analysis: Variance analysis is the examination of the difference between actual and…

Answered: Consider (a) actual costing, (b) normal…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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.

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
$990,000
$774,000
18,000 hours
Professional labor costs
Legal administration costs
Professional labor-hours billed to customers
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, a
variation from normal costing where budgeted rates are used to calculate direct costs. 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 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, a variation from normal costing where budgeted rates are used to calculate direct
costs. Explain any differences in the job cost.

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