Question

Professional Labor Cost Budget for a Service Company Rollins and Cohen, 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 December 31, 20Y8: Billable Hours Audit Department: Staff 22,400 Partners 7,900 Tax Department: Staff 13,200 Partners 5,500 Small Business Accounting Department: Staff 3,000 Partners 600 Based on the data provided above and assuming that the average compensation per hour for staff is $45 and for partners is $140, prepare a professional labor cost budget for each department for Rollins and Cohen, CPAs, for the year ending December 31, 20Y8. Rollins and Cohen, CPAs Professional Labor Cost Budget For the Year Ending December 31, 20Y8 Staff Partners Audit Department hours Tax Department hours Small Business Accounting Department hours Total hours Average compensation per hour x $ x $ Total professional labor cost $ $

Answer 1

Hello,

The above question is simple. Refer the table below for the answer:

Sr. No.	Department	Billable Hours		Compensation per Hour		Total Cost			Average Rate Dept wise
		Staff	Partners	Staff	Partners	Staff	Partners	Total
		(a)	(b)	(c)	(d)	(e) = (a) * (c)	(f) = (b) * (d)	(g) = (e) + (f)	(g) / ((a)+(b))
1	Audit	22400	7900	45	140	10,08,000	11,06,000	21,14,000	69.77
2	Tax	13200	5500	45	140	5,94,000	7,70,000	13,64,000	72.94
3	Small Business A/cng	3000	600	45	140	1,35,000	84,000	2,19,000	60.83
	Total	38600	14000			17,37,000	19,60,000	36,97,000