Question $3$

Data table

The average budgeted total compensation per professional for $2020$ is $$97,500.$ Each professional is

budgeted to have $1,500$ billable hours to clients in $2020.$ All professionals work for clients to their

maximum $1,500$ 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 Kahn & 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 $2020$ is $$2,475,000.$

The cost estimates for the Richardson, Inc. job, which requires $90$ budgeted hours of professional

labor and for the Punch, Inc. job, which requires $140$ budgeted hours of professional labor are

as follows:

Requirement $1.$ Compute the $2020$ budgeted direct$-$cost rates for $($a$)$ professional partners and $($b$)$ professional associates

Begin by selecting the formula, then enter the amounts to compute both rates. $($Abbreviations used: Assoc. $=$ Associate.$)$

More info

This review included a detailed analysis of how past jobs used the firm's resources

and interviews with personnel about what factors drive the level of indirect costs.

Management concluded that a system with two direct$-$cost categories $($professional

partner labor and professional associate labor$)$ and two indirect$-$cost

categories $($general support and secretarial support$)$ would yield more accurate job

costs.

Data table