Question

Lundquist & Fretwell, CPAs, offer three types of services to clients: auditing, tax, and small business...

Lundquist & Fretwell, CPAs, offer three types of services to clients: auditing, tax, and small business accounting. Based on experience and projected growth, the following billable hours have been estimated for the year ending May 31, 20Y8:

Billable Hours
Audit Department:
Staff 25,000
Partners 6,000
Tax Department:
Staff 40,000
Partners 8,500
Small Business Accounting Department:
Staff 5,000
Partners 500

The average billing rate for staff is $140 per hour, and the average billing rate for partners is $450 per hour.

Prepare a professional fees earned budget for Lundquist & Fretwell, CPAs, for the year ending May 31, 20Y8.

Lundquist & Fretwell, CPAs
Professional Fees Earned Budget
For the Year Ending May 31, 20Y8
Billable Hours Hourly Rate Total Revenue
Audit Department:
Staff $ $
Partners
Total $
Tax Department:
Staff $ $
Partners
Total $
Small Business Accounting Department:
Staff $ $
Partners
Total $
Total professional fees earned

Homework Answers

Answer #1

Lundquist & Fretwell, CPAs

Professional Fees Earned Budget

For the Year Ending May 31, 20Y8

Billable

Hours

Hourly

Rate

Total

Revenue

Audit Department:

Staff

25,000

$140

$ 3,500,000

Partners

6,000

450

2,700,000

Total

31,000

$ 6,200,000

Tax Department:

Staff

40,000

$140

$ 5,600,000

Partners

8,500

450

3,825,000

Total

48,500

$ 9,425,000

Small Business Accounting Department:

Staff

5,000

$140

$ 700,000

Partners

500

450

225,000

Total

5,500

$ 925,000

Total professional fees earned

$16,550,000

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