Venus Corp employs ten full-time professionals.The budgeted compensation per employee is $50,000.The maximum billable hours for each client are 500.Clients always receive their full amount of time.All professional labor 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 labor-hours.Budgeted indirect costs for the year are $250,000 and the firm had 30 clients.
Required:
a.What is the direct-labor-cost rate per hour?
b.What is the indirect-cost rate per hour?
c.What is the total cost incurred to the employer per hour?
d.How will the total cost be affected if the firm loses out on 5 clients?

Question

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The Answer of Venus Corp employs ten full-time professionals.The budgeted compensation per employee is $50,000.The maximum billable hours for each client are 500.Clients always receive their full amount of time.All professional labor 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 labor-hours.Budgeted indirect costs for the year are $250,000 and the firm had 30 clients.
Required:
a.What is the direct-labor-cost rate per hour?
b.What is the indirect-cost rate per hour?
c.What is the total cost incurred to the employer per hour?
d.How will the total cost be affected if the firm loses out on 5 clients?

Venus Corp Employs Ten Full-Time Professionals