Beacon Company does residential real estate appraisals. There are 40 professionals on its staff. Each professional is allotted the following number of hours per year:
The company receives more jobs than it can handle and therefore rejects most out of town work. The budgeted salary for each professional is $44,000 per year with fringe benefits of $11,000.
During the previous year, the actual salaries were $46,500, plus fringe benefits of $11,500.
Required:
a. What was the total budgeted direct cost rate if the company believes that clients should be charged directly for its employees' salaries and benefits?
b. What was the budgeted direct cost rate if the company wants to charge clients for employee vacation, sick leave, and professional development as an indirect cost?

Question

Beacon Company does residential real estate appraisals. There are 40 professionals on its staff. Each professional is allotted the following number of hours per year:
  The company receives more jobs than it can handle and therefore rejects most out of town work. The budgeted salary for each professional is $44,000 per year with fringe benefits of $11,000.
During the previous year, the actual salaries were $46,500, plus fringe benefits of $11,500.
Required:
a. What was the total budgeted direct cost rate if the company believes that clients should be charged directly for its employees' salaries and benefits?
b. What was the budgeted direct cost rate if the company wants to charge clients for employee vacation, sick leave, and professional development as an indirect cost?

Quizplus · Accepted Answer

The Answer of Beacon Company does residential real estate appraisals. There are 40 professionals on its staff. Each professional is allotted the following number of hours per year:
  The company receives more jobs than it can handle and therefore rejects most out of town work. The budgeted salary for each professional is $44,000 per year with fringe benefits of $11,000.
During the previous year, the actual salaries were $46,500, plus fringe benefits of $11,500.
Required:
a. What was the total budgeted direct cost rate if the company believes that clients should be charged directly for its employees' salaries and benefits?
b. What was the budgeted direct cost rate if the company wants to charge clients for employee vacation, sick leave, and professional development as an indirect cost?

Beacon Company Does Residential Real Estate Appraisals