Reference no: EM13355867

Determine the pre determined overhead cost from the given data.

Winkle, Kotter, and Zale is a small law firm that contains 10 partners and 10 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 t 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	20,000	-
Direct attorney-hours	9,000	16,000
Materials and supplies	$18,000	$5,000
Direct attorney cost	$430,000	$800,000
Departmental overhead cost	$700,000	$320,000

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 cost 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	18	-
Direct attorney-hours	9	42
Materials and supplies	$50	$30
Direct attorney cost	$410	$2,100

Required:

Compute the predetermined overhead rate used during the year in the Research and Documents Department. Compute the rate used in the Litigation Department.