Homework: chapter 5 HW Save Score: 0 of 15 pts 5 of 6 (1 complete) HW Score: 1.8

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Homework: chapter 5 HW Save Score: 0 of 15 pts 5 of 6 (1 complete) HW Score: 1.89%, 2.37 of 125 pts P5-31 (similar to) Question Help Bruschi Associates is a recently formed law partnership. Sara Hamilton, the managing partner of Bruschi Associates, has just finished a tense phone call wih Matt Jabar, president of Jabar Enterprises. Matt strongly complained about the price Bruschi charged for some legal work done for his company. (Click the icon to view additional information.) Read the requirements. Requirement 1. Why is it important for Bruschi Associates to understand the costs associated with individual jobs? Requirements OA. Operating at or above capacity for the company lowers overall costs to individual jobs. B. Pricing decisions are heavily influenced by reported cost numbers. O C. Overstaffing any job would be detrimental to the company's bottom line. 1. Why is it important for Bruschi Associates to understand the costs associated D. All of the above. ith individual jobs? 2. Compute the costs of the Jabar Enterprises and Marble Inc. jobs using More Infto Bruschi's simple costing system. PrintDone Hamilton also recelved a phone call from its only other client, Marble, Inc., which was very pleased with both the quality of the work and the price charged on its most recent job. Bruschi Associates operates at capacity and uses a cost-based approach to pricing (billing) each job. Currently it uses a simple costing system with a single direct-cost category (orofessional labor-hours) and a single indirect-cost pool (general support). Indirect costs are allocated to cases on the basis of professional labcr-hours per case. The job files show the follewing: Jabar Enterprises Marble Inc. Professional labor 2,600 hours 2,400 hours Professional labor costs at Bruschi Associates are $250 an hour. Indirect costs are allocated to cases at S120 an hour. Total indirect costs in the most recent period were $600,000. Print Done Click to select your answer and then click Check Answer

Explanation / Answer

Answer: Requirement 1 B. Pricing decisions are Heavily influenced by reported cost numbers As it the cost is overstated it may lose the client or if the cost is understated it may incurr loss. Requirement 2 Jabar Enterprices Marble Inc. Direct professional labour $        650,000.00 $                     600,000.00 (2600*$250) (2400*$250) Indirect Cost allocation $        312,000.00 $                     288,000.00 (2600*$120) (2400*$120) Total costs to be billed $        962,000.00 $                     888,000.00

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