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tcharged to Case 618-3? Show computations by department and in total for the case.3. What would be the total costDepartmentsResearchandDocumentsLitigationTotalMaterials and suppliesDirect attorney costOverhead cost appliedTotal cost4. At the end of the year, the firm's records revealed the following actual cost and operating data for all cases handled during the year:DepartmentResearchandDocuments Litigation22,7008,400$18,400$ 399,400$769,500Research-hoursDirect attorney-hoursMaterials and suppliesDirect attorney costDepartmental overhead cost14,600$5,100$725,800$300,800Determine the amount of underapplied or overapplied overhead cost in each department for the yearDepartmentResearchandDocumentsLitigationDepartmental overhead cost incumredDepartmental overhead cost appliedUnderapplied (or overapplied) overhead

Question

Winkle, Kotter, and Zale is a small law firm that contains 10 partners and 12 support persons. The firm employs a job-order costing system to accumulate costs chargeable to each client, and it is organized into two departments—the Research and Documents Department and the Litigation Department. The firm uses predetermined overhead rates to charge the costs of these departments to its clients. At the beginning of the current year, the firm's management made the following estimates for the year:

     

  Department
  Research
and Documents
  Litigation
Research-hours   20,400       -  
Direct attorney-hours   9,300       16,400  
Materials and supplies $ 17,700     $ 5,500  
Direct attorney cost $ 430,100     $ 799,400  
Departmental overhead cost $ 714,000     $ 311,766  

 

 

The predetermined overhead rate in the Research and Documents Department is based on research-hours, and the rate in the Litigation Department is based on direct attorney cost.

The costs charged to each client are made up of three elements: materials and supplies used, direct attorney costs incurred, and an applied amount of overhead from each department in which work is performed on the case.

Case 618-3 was initiated on February 10 and completed on June 30. During this period, the following costs and time were recorded on the case:

    

  Department
  Research
and Documents
  Litigation
Research-hours   17       -  
Direct attorney-hours   10       42  
Materials and supplies $ 52     $ 31  
Direct attorney cost $ 410     $ 2,000  

 

 

Required:   

1-a. Compute the predetermined overhead rate used during the year in the Research and Documents Department.

 

 
 
Predetermined overhead rate   per hour

 

1-b. Compute the predetermined overhead rate used during the year in the Litigation Department.

 

 
 
Predetermined overhead rate   % of direct attorney cost

 

2. Using the rates you computed in (1) above, compute the total overhead cost applied to Case 618–3.

 

  

 
 
Total overhead cost  

 

3. What would be the total cost charged to Case 618–3? Show computations by department and in total for the case.

 

 
 

4. At the end of the year, the firm’s records revealed the following actual cost and operating data for all cases handled during the year:

     

  Department
  Research
and Documents
  Litigation
Research-hours   22,700       -  
Direct attorney-hours   8,400       14,600  
Materials and supplies $ 18,400     $ 5,100  
Direct attorney cost $ 399,400     $ 725,800  
Departmental overhead cost $ 769,500     $ 300,800  

 

    

Determine the amount of underapplied or overapplied overhead cost in each department for the year.

 

 

tcharged to Case 618-3? Show computations by department and in total for the case.
3. What would be the total cost
Departments
Research
and
Documents
Litigation
Total
Materials and supplies
Direct attorney cost
Overhead cost applied
Total cost
4. At the end of the year, the firm's records revealed the following actual cost and operating data for all cases handled during the year:
Department
Research
and
Documents Litigation
22,700
8,400
$18,400
$ 399,400
$769,500
Research-hours
Direct attorney-hours
Materials and supplies
Direct attorney cost
Departmental overhead cost
14,600
$5,100
$725,800
$300,800
Determine the amount of underapplied or overapplied overhead cost in each department for the year
Department
Research
and
Documents
Litigation
Departmental overhead cost incumred
Departmental overhead cost applied
Underapplied (or overapplied) overhead
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tcharged to Case 618-3? Show computations by department and in total for the case. 3. What would be the total cost Departments Research and Documents Litigation Total Materials and supplies Direct attorney cost Overhead cost applied Total cost 4. At the end of the year, the firm's records revealed the following actual cost and operating data for all cases handled during the year: Department Research and Documents Litigation 22,700 8,400 $18,400 $ 399,400 $769,500 Research-hours Direct attorney-hours Materials and supplies Direct attorney cost Departmental overhead cost 14,600 $5,100 $725,800 $300,800 Determine the amount of underapplied or overapplied overhead cost in each department for the year Department Research and Documents Litigation Departmental overhead cost incumred Departmental overhead cost applied Underapplied (or overapplied) overhead

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check_circleAnswer
Step 1

1-a

Calculate predetermined overhead rate for Research and Documents Department:

 

 

|$714,000
Departmental cost (A)
Research hours (B)
20,400
$35
Predetermined overhead rate (A + B)
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|$714,000 Departmental cost (A) Research hours (B) 20,400 $35 Predetermined overhead rate (A + B)

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Step 2

1-b:

Calculate predetermined overhead rate for  Litigation Department:

 

$799,400
Departmental direct attorney cost (A)
Department overhead cost (B)
Predetermined overhead rate (B A*100)
$311,766
39.00%
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$799,400 Departmental direct attorney cost (A) Department overhead cost (B) Predetermined overhead rate (B A*100) $311,766 39.00%

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Step 3

2.

Calculate total overhead c...

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