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service industry job costing two direct and two indirect cost categories law firm ke 4270358

Service industry, job costing, two direct- and two indirect-cost categories, law firm. Keating has just completed a review of its job-costing system. This review included a detailed analysis of how past jobs used the firm’s resources and interviews with personnel about what factors drive the level of indirect costs. Management concluded that a system with two direct-cost categories (professional partner labor and professional associate labor) and two indirect-cost categories (general support and secretarial support) would yield more-accurate job costs. Budgeted information for 2008 related to the two direct-cost categories is as follows:

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