Week 1 Equations and Homework

Week 1 Equations and Homework - Week 1 Equations and...

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Week 1 Equations and Homework 5.28 Job costing with single direct-cost category, single indirect-cost pool, law firm. Wigan’s is a law firm. Once client Widnes coal complained about the cost of the services from Wigan’s. Whereas St. Helen’s Glass, thought the services and the price were fine. Wigans operates at capacity and uses a cost-based approach to pricing (billing). Widnes Coal St. Helen’s Glass Professional Labour 104 hrs 96 hours Professional labour costs at Wigans is $70 per hour. Indirect costs are allocated to cases at $105 an hour. Total indirect costs in the most recent period were $21,000. 1. Why is it important for Wigan Associates to understand the costs associated with individual jobs? Wigan Associates must understand the costs associated with individual job in order to allocate appropriate costs to each job. As their billing is on a cost based approach, the firm would need to accurately track the number of professional and general support hours in order to bill each client. The pricing decisions are heavily influenced by reported cost numbers. Suppose Wigan is
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This note was uploaded on 04/03/2011 for the course ACCT 434 taught by Professor Hayes during the Spring '11 term at DeVry Kansas City.

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Week 1 Equations and Homework - Week 1 Equations and...

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