Assignment
Smith and Associates is an accounting consulting firm located in Bel Aires. The firm specializes in the costing of products and services, and management accounting. The firm employs 25 professionals, 5 of whom are partners, 10 are associates, and 10 are staff accountants. The budgeted annual total compensation per professional for 2002 is a follows:
Partner $104,000
Associate 50,000
Staff Accountant 72,000
The budgeted hours per professional are as follows:
Partner 1,000 hours each
Associate 1,600 hours each
Staff Accountant 1,200 hours each
The firm traces the direct cost of its professional staff consisting of partners, associates, and staff accountants to jobs on a per hour basis.
All costs of Smith and Associates, other than professional staff costs, are included in a single indirect cost pool called accounting support. This cost is allocated to jobs using the total of the professional staff labor-hours as the allocation base. The budgeted level of indirect costs in 2001 was $2,088,000.
1. Calculate the total number of hours for EACH type of professional staff in 2002.
2. Calculate the total compensation for EACH type of professional staff for 2002.
3. Calculate the budgeted direct cost rate per hour for EACH type of professional staff.
4. Calculate the 2001 budgeted indirect cost rate per hour of professional labor.