Question
Virginia's Consultants employs 10 full-time management consultants. The budgeted annual compensation per employee is $75,000. The average time charged per client is 250 hours per
Virginia's Consultants employs 10 full-time management consultants. The budgeted annual compensation per employee is $75,000. The average time charged per client is 250 hours per year. The professional consultant labor costs are included in a single direct-cost category and they are allocated to jobs on a per-hour basis.
The others costs associated with the consultant firm are included in a single indirect-cost pool, allocated according to professional labor hours. The budgeted indirect cost for the year are $500,000, and the firm expect to have 50 new clients in the next year.
What is the budgeted direct-labor cost rate per hour?
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