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5-30 Job costing with single direct-cost category, single indirect-cost pool, law firm. Bradley Associates is...

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Accounting

5-30 Job costing with single direct-cost category, single indirect-cost pool, law firm. Bradley Associates is a recently formed law partnership. Emmit Harrington, the managing partner of Bradley Associates, has just finished a tense phone all with Martin Omar, President of Campa Coal.

Harrington also recieved a phone call from its only client( St. Edith's Glass), which was very pleased with both the quality of the work and the price charged on its most recent job.

Bradley Associates operates at capacity and uses a cost-based approach to pricing(billing) each job, Currently it uses a simple costing system witha single direct-cost category( professional Labor-hours) and single labor-hours per case. the jobe files sho the following:

Campa Coal St. Edith's Glass
Professional Labor 150 hours 100 hours

Professional labor costs at Bradley Associates are $80 an hour. Indirect Costs are allocated to cases at $100 an hour. Total indirect costs in the most recent period were $25,000.

1. Why is it important for Bradely Associates to understand the costs associated with individual job?

2. Compute the costs of the campa Coal and St. Edith's Glass jobs using Bradley's simple costing system.

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