Wardlaw Company, ( It is the same company!) a mid-sizedengineering firm operates in mid-town Toronto from a suiteof offices on the fifth floor of a high-rise office building .

All professional personnel - Engineers, Computer Specialists,Surveyors, Managerial/Tax Accountants, Sales and Adminpersonnel 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

FixedCosts:

Rent:10,000SqMeters$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- Clientfocused$1,300,000

Blueprinting/Design-JobSpecific$2,450,000OtherSupplies$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 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:

1. Identify Non-financial issues to be considered