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costacctg13_sm_ch05

# Helens glass as a result it also uses less o f the

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Unformatted text preview: ool, law firm (continuation of 5­28). 1. Indirect costs = \$7,000 Total professional labor­hours = 200 hours (104 hours on Widnes Coal + 96 hours on St. Helen’s Glass) Indirect cost allocated per professional labor­hour (revised) = \$7,000 ÷ 200 = \$35 per hour 2. Direct costs: Direct professio nal labor, \$70 × 104; \$70 × 96 Research support labor Computer time Travel and allowances Telephones/faxes Photocopying Total direct costs Indirect costs allocated, \$35 × 104; \$35 × 96 Total costs to be billed 3. Widnes Coal St. Helen’s Glass Total \$ 7,280 1,600 500 600 200 250 10,430 3,640 \$14,070 \$ 6,720 3,400 1,300 4,400 1,000 750 17,570 3,360 \$20,930 \$14,000 5,000 1,800 5,000 1,200 1,000 28,000 7,000 \$35,000 Widnes Coal Problem 5­28 Problem 5­29 \$18,200 14,070 St. Helen’s Glass \$16,800 20,930 Total \$35,000 35,000 The Problem 5­29 approach direct ly traces \$14,000 of general support costs to the individua l jo bs. In Problem 5­28, these costs are allocated on the basis of direct prof...
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