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 SqMeters$8,250,000

Salariesallfixed:30,000,000

Engineering/Survey Equipment1,250,000

Marketing- Professional/Industryjournals750,000

Computers-Hardware8,750,000

Annual Variable Costs include:

Marketing/Travel- Client focused$1,300,000

Blueprinting/Design-JobSpecific$2,450,000

Other Supplies$1,250,000

Software$1,285,000

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

Required:

Suggest methods for charging both fixed andVariable 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