Reference no: EM133184111
Question - The Ulysses Design Group provides architectural services for residential and business clients and employs 25 professional architects. Its job-costing system has a single direct-cost category (professional labour costs) and a single indirect-cost category (client support costs, which contains all the costs in the Client Support Department). Client support costs are allocated to individual jobs using actual professional labour-hours.
Budgeted and actual amounts for 2015 are as follows:
Table 1 - Budgeted amounts at Ulysses Design Group
|
$
|
hours
|
|
Professional labour costs
|
4,000,000
|
|
|
Client Support Department costs
|
2,600,000
|
|
|
Professional labour-hours billed to clients
|
|
40,000
|
Table 2 - Actual amounts at Ulysses Design Group
|
$
|
hours
|
|
Client Support Department costs
|
2,436,000
|
|
|
Professional labour-hours billed to clients
|
|
42,000
|
|
Actual professional labour cost rate
|
110 per hour
|
|
In 2015, Ulysses Design Group designed a new sporting complex for Classic Sports Management Pty Ltd. Ulysses Design Group budgeted to spend 1,500 professional labour-hours on the project. Actual professional labour-hours spent on the project were 1,720.
Required -
(a) Calculate the budgeted indirect cost for the new sporting complex design. Show all the workings.
(b) Calculate the actual indirect cost allocated for the new sporting complex design using the budgeted rates. Show all the workings.
(c) Calculate the amount of over or under allocation of overhead for the year. Indicate if it is over or under-allocation and why. Show all the workings.