Bhimani, Horngren,
Datar and Rajan,
Management and Cost Accounting, 5
th
Edition, Instructor’s Manual
© Pearson Education Limited 2012
Requirement 1 Requirement 2 Fortune Plassans
€12,506
€11,620
Au Bonheur des Dames 5,668 6,360
€18,174
€17,980 Both clients use 40 hours of professional labour time. However, Fortune Plassans uses a higher proportion of Raquin’s time (15 hours, which attracts the highest support-services charge.
3 Assume that the Germinal Group uses a cause-and-effect criterion when choosing the allocation base for support services. You could use several pieces of evidence to determine whether professional labour costs or hours is the driver of support-service costs
a Interviews with personnel. For example, staff in the major cost categories in support services could be interviewed to determine whether Raquin requires
more support per hour than, say, Bernard. The professional labour costs allocation base implies that an hour of Raquin’s time requires 6.25 (€500 ÷ €80) times more support service Euros than does an hour of Bernard’s time.
b Analysis of tasks undertaken for selected clients. For example, if computer- related costs area
sizeable part of support costs, you could determine if there was a systematic relationship between the percentage involvement of professionals with high billing rates on cases and the computer resources consumed for those cases.
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