Reference no: EM1311225
Determine the total overhead 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:
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Department
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Research and Documents
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Litigation
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Research-hours
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20,000
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-
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Direct attorney-hours
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9,000
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16,000
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Materials and supplies
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$18,000
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$5,000
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Direct attorney cost
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$430,000
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$800,000
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Departmental overhead cost
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$700,000
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$320,000
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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:
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Department
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Research and Documents
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Litigation
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Research-hours
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18
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-
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Direct attorney-hours
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9
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42
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Materials and supplies
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$50
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$30
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Direct attorney cost
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$410
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$2,100
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Required:
Using the rates you computed, compute the total overhead cost applied to Case 618-3.
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