Bilkins Financial Advisors provides accounting and finance assistance to customers in the retail business.Bilkins has 6 professionals on staff,plus an office with 8 clerical staff.Total compensation,including benefits,for the professional staff runs about $911,250 per year and they normally have about 9000 billable hours per year.Professional staff keep detailed time sheets organised by the client number.Office and administrative costs total $684,000 a year.
Bilkins allocates professional time and office and administrative costs to clients monthly,using allocation rates based on billable hours.During July,Bilkins's professionals spent 38 hours on their client,Soupy Sales.What is the total amount of cost that Bilkins will record for the client for the month? (Round your intermediate calculations to two decimal places)

Question

Quizplus · Accepted Answer

The cost per billable hour is calculated by dividing the total compensation for professional staff by the total billable hours: $911,250 / 9,000 = $101.25 per hour. The office and administrative cost per billable hour is $684,000 / 9,000 = $76 per hour. The total cost per hour is $101.25 + $76 = $177.25. For 38 hours, the total cost is 38 * $177.25 = $6,736.50, which rounds to $6,736.

Bilkins Financial Advisors Provides Accounting and Finance Assistance to Customers