Service Industry ~ Job costing Keating and Associates is a lawfirm specializing in labor relations and employee-related work. Itemploys 25 professionals (5 partners and 20 associates) who workdirectly with its clients. The average budgeted total compensationper professional for the current year is $104,000 and eachprofessional is budgeted to have 1,600 annual billable hours toclients. Keating is a highly respected firm, and all professionalswork for clients to their maximum 1,600 billable hours available.All professional labor costs are included in a single direct-costcategory and are traced to jobs on a per-hour basis. All costs ofKeating and Associates other than professional labor costs areincluded in a single indirect cost pool (legal support) and areallocated to jobs using professional labor-hours as the allocationbasis. The budgeted level of indirect costs for the current year is$2,200,000.
1. Present an overview diagram of Keating’s job-costingsystem.
2. Compute the annual budgeted direct-cost rate per hour ofprofessional labor.
3. Compute the annual budgeted indirect-cost rate per hour ofprofessional labor.
4. Keating & Associates is considering bidding on twojobs:
a. Litigation for Richardson, Inc., which requires 100 budgetedhours of professional labor.
b. Labor contract work for Punch, Inc., which requires 150budgeted hours of professional labor.
6.Prepare a cost estimate for each job.
Please label answers e.g (1, 1a, ..)
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