Question
Keaton & Associates is a law firm specializing in labor relations and employee-related work. It employs 2525 professionals (55 partners and 2020 associates) who work
Keaton & Associates is a law firm specializing in labor relations and employee-related work. It employs 2525 professionals (55 partners and 2020 associates) who work directly with its clients. The average budgeted total compensation per professional for 2017 is $ 117 000. Each professional is budgeted to have 1800 billable hours to clients in 2017. All professionals work for clients to their maximum 1 800 billable hours available. All professional labor costs are included in a single direct-cost category and are traced to jobs on a per-hour basis. All costs of KeatonKeaton & Associates other than professional labor costs are included in a single indirect-cost pool (legal support) and are allocated to jobs using professional labor-hours as the allocation base. The budgeted level of indirect costs in 2017is $ 2 38500
2. | Compute the 2017 budgeted direct-cost rate per hour of professional labor. | |
3. | Compute the 2017 budgeted indirect-cost rate per hour of professional labor. | |
4. | Keaton & Associates is considering bidding on two jobs: | |
a. | Litigation work for Richardson, Inc., which requires 120 budgeted hours of professional labor. | |
b. | Labor contract work for Punch, Inc., which requires 145 budgeted hours of professional labor. Prepare a cost estimate for each job. |
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