519 20min plantwidedepartmentandabcindirectcostrates 1

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: is of direct professio nal labor costs. 5­6 3. Assume that the Wo lfson Group uses a cause­and­effect criterion when choosing the allocat ion base for support services. You could use several pieces o f evidence to determine whether professio nal labor costs or hours is the dr iver of support­service costs: a. Interviews with personnel. For example, staff in the major cost categories in support services could be interviewed to determine whether Wo lfson requires more support per hour than, say, Anderson. The professio nal labor costs allocat ion base implies that an hour of Wo lfso n’s t ime requires 6.25 ($500 ÷ $80) times more support­service dollars than does an hour of Anderson’s time. b. Analysis of tasks undertaken for selected clients. For example, if co mputer­related costs are a sizable part of support costs, you could determine if there was a systemat ic relat ionship between the percentage invo lvement of professio nals wit h high billing rates on cases and the compute...
View Full Document

{[ snackBarMessage ]}

Ask a homework question - tutors are online