An accounting firm provides tax consulting for estates and trusts. Their job costing system has a ...

a.   Budget rates are normally used because the actual costs of performing the work will not usually be available until sometime after a job is completed. Decisions about billing a client for services rendered generally must be made immediately after the job is completed. Also, actual costs may reflect short-run changes in the environment which may distort the billing process. Budgeted costs are not affected by weekly or monthly fluctuations and therefore offer a stable comparison and assignment of costs throughout the accounting cycle.
b.   Having separate professional labour hour rates assists in assigning the personnel costs to jobs closest to their real values. This helps to maintain different costs for jobs which have the same number of hours but a different mix of professionals doing the job. Seldom is there only one cause and effect relationship between a job and the tasks performed on the job; therefore, it may also be a good idea to develop multiple indirect cost assignments (i.e., one for staff support and others for such items as computer support or general administrative support).