1. Wardlaw Company, ( It is the same company!) a mid-sized engineering firm operates in mid-town Toronto from a suite of offices on the fifth floor of a high-rise office building. All professional personnel - Engineers, Computer Specialists, Surveyors, Managerial/Tax Accountants, Sales and Admin personnel are on fixed salary - Annual Payroll, all fixed.

Fixed Costs

Rent (10,000 sqr meters)	$8,250,000
Salaries all fixed	$30,000,000
Engineering/Survey Equipment	$1,250,000
Marketing - Professional/Industry Journals	$750,000
Computers - Hardware	$8,750,000

Annual VC include

Marketing/Travel - Client Focused	$1,300,000
Blueprinting/Design - Job Specific	$2,450,000
Other supplies	$1,250,000
Software	$1,285,000

Wardlaw has hired your managerial accounting firm to design a Project Management System.

Required: Suggest methods for charging both fixed and variable costs.Your answer must address

Cost behavior:

1. Cost drivers

2. Direct Costs

3. Indirect Costs

4. Client Profile - Large vs small

5. Client focused charges

6. Distance/mileage charges

Non-financial:

7. Identify Non-financial issues to be considered