Mackenzie Consulting computes the cost of each consulting engagement by adding a portion of frimwide support costs to the labor cost of the consultants on the engagement. The supportcosts are assigned to each consulting engagement using a cost driver rate based on consultant labor costs. Mackenzie Consulting's support costs are 5 million per year, and total consultant labor cost is estimated at 2.5 million per year.
a. What is Mackenzie Consulting's support cost driverrate?
b. If the consultant labor cost on an engagement is 25,000, what cost will Mackenzie Consulting compute as the total cost of the consulting engagement?