Job costing with single direct-cost category, single ...

[biggirl4568]

Job costing with single direct-cost category, single indirect-cost pool, law firm.
 
  Bradley Associates is a recently formed law partnershi

Question 2

Wages Expense is a(n)
 a. asset.
  b. liability.
  c. revenue.
  d. expense.

[aburgess]

Answer to Question 1

1. Pricing decisions at Bradley Associates are heavily influenced by reported cost numbers. Suppose Bradley is bidding against another firm for a client with a job similar to that of Campa Coal. If the costing system overstates the costs of these jobs, Bradley may bid too high and fail to land the client. If the costing system understates the costs of these jobs, Bradley may bid low, land the client, and then lose money in handling the case.

2. Campa St. Edith's
Coal Glass Total
Direct professional labor,
80  150; 80  100 12,000  8,000 20,000
Indirect costs allocated,
100  150; 100  100 15,000 10,000 25,000
Total costs to be billed 27,000 18,000 45,000

Answer to Question 2

D

[biggirl4568]

TYSM

[Jsherida]

Thanks for the timely response, appreciate it