Computing direct-cost rates, consulting firm. (15-20 minutes)

Zimmermann, GmbH, is an international consulting firm. Its 1999 annual budget includes the following for each category of professional labour: lo1

REQUIRED 1. Calculate the budgeted direct-cost rate for professional labour (salary and fringe benefits) per hour for

(a) directors,

(b) partners, (C) associates and

(d) assistants. Use budgeted billable time for clients as the denominator in these computations.
2. Repeat requirement 1. Use the sum of budgeted billable time, vacation and sick leave time and professional development time as the denominator in these calculations.
3. Why are the rates different between requirements 1 and 2? How might these differences affect job costing by Zimmermann, GmbH?

Transcribed Image Text:

BILLABLE VACATION UNBILLED TIME TIME AND AVERAGE AVERAGE FOR FRINGE CLIENTS SICK PROFESSIONAL. DUE TO CATEGORY SALARY LEAVE DEVELOPMENT LACK OF BENEFITS (HOURS) (HOURS) (HOURS) (HOURS) DEMAND Director DM 280,000 DM 120,000 1,600 160 240 Partner 210,000 90,000 1,600 160 240 Associate 120,000 40,000 1,600 160 240 000 Assistant 76,000 24,000 1,600 160 240 0