Answered step by step
Verified Expert Solution
Question
1 Approved Answer
XYZ Law Firm, LLP is considering representing a new client. All legal procedures will be carried out in City Z and not in City A
XYZ Law Firm, LLP is considering representing a new client. All legal procedures will be carried out in City Z and not in City A as is normally the case with the rest of the firm's clients. It is estimated that the case will require the assignment of lawyers and days of work in City Z A total of hours are expected to be billed to the new client. The law firm's accountant is trying to determine the incremental cost of taking on this client and has asked for your help.
REQUIRED: Indicate the total relevant cost by analyzing the following elements as they relate to accepting the new customer.
The case will require the three attorneys to stay nights at a hotel in City Z The expected hotel bill is $ per night plus taxes and hotel service charges.
Lawyers at the firm are paid $ per day for assignments outside of City A
Last year, the depreciation of the XYZ LLP office in City A was $
Roundtrip transportation to City Z is expected to cost $ per person.
The firm has recently accepted another legal commitment that will require several partners to spend two weeks in City W The expected expenses for this trip are $
The law firm has a maintenance contract for its copier equipment that will cost $ next year.
If the firm accepts the new client and sends lawyers to City Z it will have to reject a conflicting engagement in City A that would have provided a net cash inflow of $
The firm's variable overhead is $ per client hour.
The firm pays $ a year for a subscription to a law journal.
Last year, the firm paid $ to upgrade the central air conditioning equipment in its building.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started