In: Accounting
The law firm of Topson Law Firm & Co., currently has four cases as of the end of October 2015:
Case #1 |
Case #2 |
Case #3 |
Case #4 |
|
Direct Material |
$480 |
$8,800 |
$3,700 |
$850 |
Direct Labor ($190 per hour) |
40 |
90 |
70 |
15 |
Estimated court hours |
12 |
65 |
120 |
40 |
The law firm allocates overhead to cases based on a predetermined rate of $150 per estimated court hour.
Required:
· Determine the total costs assigned in different cases.
· Assume Case #3 was completed at the end of November 2015. At that time, $10,100 of direct materials had been used and 174 direct labor hours had been incurred. Of the DLHs, 102 had not been spent in court. Topson’s policy is to charge client costs plus 45%. What amount will be billed to the client involved in Case #3?
Problem 3
The work in process account of Meyers Company showed:
Work in Process |
|
DR |
CR |
Materials $22,000 |
Finished goods $68,000 |
Direct labor 37,000 |
|
Factory overhead 55,500 |
Materials charged to the one job still in process amounted to $5,000. Factory overhead is applied as a predetermined percentage of direct labor cost.
Required: Compute the following:
· The amount of direct labor cost in finished goods.
· The amount of factory overhead in finished goods.