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1. Computing direct-cost rates, consulting firm. Zimmerman GmbH is an international consulting firm. Its annual budget includes the following for each category of professional labour:
1. Computing direct-cost rates, consulting firm. Zimmerman GmbH is an international consulting firm. Its annual budget includes the following for each category of professional labour: Billable time Vacation and Unbilled time Category Professional Average fringe Average salary benefits for clients sick leave due to lack of development (hours) (hours) (hours) demand Director 140 000 60 000 1 600 160 240 0 Partner 105 000 45 0001 1 600 160 240 0 Associate 60 000 20 000 1 600 160 240 0 Assistant 38 000 12 000 1 600 160 240 0 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
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