Answered step by step
Verified Expert Solution
Link Copied!

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 3 lawyers and 8 days of work in City Z. A total of 921 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.
1. The case will require the three attorneys to stay 7 nights at a hotel in City Z. The expected hotel bill is $300 per night plus 17% taxes and hotel service charges.
2. Lawyers at the firm are paid $2,000 per day for assignments outside of City A,
3. Last year, the depreciation of the XYZ, LLP office in City A was $25,000.
4. Round-trip transportation to City Z is expected to cost $150 per person.
5. 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 $25,000.
6. The law firm has a maintenance contract for its copier equipment that will cost $2,200 next year.
7. 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 $15,000.
8. The firm's variable overhead is $125 per client hour.
9. The firm pays $900 a year for a subscription to a law journal.
10. Last year, the firm paid $22,500 to upgrade the central air conditioning equipment in its building.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Management Accounting Text Problems And Cases

Authors: M. Y. Khan, P K Jain

7th Edition

9352606787, 978-9352606788

More Books

Students also viewed these Accounting questions

Question

1. Follow directions the first time.

Answered: 1 week ago

Question

Explain the guideline for job description.

Answered: 1 week ago

Question

What is job description ? State the uses of job description.

Answered: 1 week ago

Question

What are the objectives of job evaluation ?

Answered: 1 week ago

Question

Write a note on job design.

Answered: 1 week ago

Question

=+5. What is your impression of the Carbon Principles?

Answered: 1 week ago