A local solicitor employs 15 full-time professionals.The budgeted compensation per employee is
$100 000.The maximum billable hours for each client are 400.Clients always receive their full amount of time.All professional labour costs are included in a single direct-cost category and are traced to jobs on a per-hour basis.Any other costs are included in a single indirect-cost pool,allocated according to professional labour-hours.Budgeted indirect costs for the year are $600 000 and the firm had 30 clients.
Required:
a.What is the direct-labour-cost rate per hour?
b.What is the indirect-cost rate per hour?
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Question

Quizplus · Accepted Answer

The Answer of A local solicitor employs 15 full-time professionals.The budgeted compensation per employee is
$100 000.The maximum billable hours for each client are 400.Clients always receive their full amount of time.All professional labour costs are included in a single direct-cost category and are traced to jobs on a per-hour basis.Any other costs are included in a single indirect-cost pool,allocated according to professional labour-hours.Budgeted indirect costs for the year are $600 000 and the firm had 30 clients.
Required:
a.What is the direct-labour-cost rate per hour?
b.What is the indirect-cost rate per hour?
_____________________________________________________________________________________________
_____________________________________________________________________________________________

A Local Solicitor Employs 15 Full-Time Professionals