Smith and Jones CPA firm employs 12 accountants and 10 paraprofessionals. Direct and indirect costs are applied on a professional labor-hour basis that includes both attorney and paraprofessional hours. Following is information for 2018:

What are the actual direct-cost rate and the actual indirect-cost rate, respectively, per professional labor-hour?

Question

Smith and Jones CPA firm employs 12 accountants and 10 paraprofessionals. Direct and indirect costs are applied on a professional labor-hour basis that includes both attorney and paraprofessional hours. Following is information for 2018:

What are the actual direct-cost rate and the actual indirect-cost rate, respectively, per professional labor-hour?

Quizplus · Accepted Answer

[($105,000 × 12) + ($33,000 × 10)] / 25,000 = $63.60 actual direct rate
$310,000 / 25,000 = $12.40 actual indirect rate

Smith and Jones CPA Firm Employs 12 Accountants and 10