Question:Nelson Accounting Partnership uses a job cost system with a
cost allocation rate of direct labour...
Question
Nelson Accounting Partnership uses a job cost system with a
cost allocation rate of direct labour...
Nelson Accounting Partnership uses a job cost system with a
cost allocation rate of direct labour hours. At the beginning of
year they budgeted total Direct Labour hours to be 20,000. They
expect direct labour cost to be $2,800,000. They expect Office Rent
to be $400,000, support salaries to be $150,000, utilities to be
$95,000, and depreciation on office equipment to be $75,000.
Nelson Accounting partnership charges $200 for a simple tax
return, which takes an average of 0.75 direct labour hours to
complete. What is the total estimated cost for a simple tax return?
What is the profit in dollars? As a % of expenses?
Nelson Accounting partnership charges $30,000 for a yearly
audit on client A. They expect the audit to take 120 direct labour
hours to complete. What is the total expect cost for this audit?
What is the profit in dollars? As a % of expenses?
Should Nelson Accounting partnership focus more on attracting
small jobs like those in question a or larger like in question
b?