Morgan & Morgan is a small firm that assists clients in the preparation of their tax returns.The firm has five accountants and five researchers,and it uses job order costing to determine the cost of each client's return.The firm is divided into two departments: (1)Preparation and (2)Research & Planning.Each department has its own overhead application rate.The Preparation Department's rate is based on accountant labor costs and Research & Planning is based on the number of research hours.The following is the company's estimates for the current year's operations.
Client No.2006-713 was completed during April of the current year and incurred the following costs and hours:
a.Compute the overhead rates to be used by both departments.
b.Determine the cost of Client No.2006-713,by department and in total.
Definitions:
Direct Exporting
A method of entering a foreign market by selling goods directly to customers in another country, bypassing any intermediaries.
Back Translation
The process where a text is translated from one language to another and then translated back to the original language by a different translator to check for accuracy.
Market Entry Strategy
The strategic approach to providing products or services to a new audience and distributing them within that market.
Profit Potential
The capacity of a business or investment to generate earnings over time.
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