1
ANSWERS TO CASE I
Requirement 1
Job costs are associated more strongly with hours worked on and traveled to those jobs
than with job visits. Visits often differ substantially in terms of the hours worked, hours
traveled, and support office hours dedicated to particular jobs.
Requirement 2
Many of your hours worked and, hence, many of your imputed labor costs can be related
exclusively to particular jobs. Therefore, these types of labor hours and labor imputed
costs can be unambiguously assigned to these particular jobs, and categorized as direct
labor hours and direct labor costs respectively. Almost all hours worked for customers on
premises are likely to belong to this category of direct inputs and direct costs. Certain
office hours worked for more than one customer and their associated costs would be
classified as indirect.
On the other hand, many non-labor office costs may be difficult to relate exclusively to
particular jobs. Office rental cost is one obvious example. Hence, they are classified as
Page | 1
