THE CPA FIRM You are partner for a CPA firm who just completed an audit of a client's financial statements. On the right of the below was the plan for the audit as follows: When planning for the audit, you budgeted 220 hours with a labor mix of 5% partner time, 20% senior accountant and 75% junior accountant. The cost per hour for the three classes of employees ranges from $30 per hour for juniors, $120 per hour for seniors and $300 per hour for partners. They projected the cost of the audit to be $13,530. Using your normal markup of 30%, you had bid $17,589. Initially the time records indicated that the firm came in under budget at 200 hours, completing it in 20 hours less than planned! Naturally you were excited, until you saw the actual numbers, which are shown on the left. These indicate that the actual cost of completing the job was $22,400, which was some $8,870 more than our budget! Not only that, but the actual cost of the job was so large that it actually exceeded the quoted price for the job by almost $5,000. Wow! Turns out that three things were different. 1)