Question
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
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 Sq 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 Variable Costs 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 behaviour:
Cost drivers Direct Costs Indirect Costs Client Profile Large vs small Client-focused charges Distance/mileage charges Non-financial: Identify Non-financial issues to be considered
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