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QUESTION - ABC & Associates is a public accounting firm that specialises in providing accounting and auditing sery Its job-costing system has one direct cost pool, professional labour and a single indirect cost pool t includes all supporting costs of running the office. The support costs are allocated to clients on the bash professional labour-hours. In addition to the two senior partners, ABC has six partners who work dire with clients. Each of the eight partners is expected to work for approximately 2 650 hours a year. Budge and actual costs for 2016 were:
Budgeted professional labour costs
$4,240,000
Budgeted support costs
$2,000,000
Actual professional labour costs
$4,893,000
Actual support costs
$2,400,000
Actual total professional hours
23,300 hours
Required: Calculate the direct and indirect costs rate per professional labour-hour under:
(a) Actual costing
(b) Normal costing
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