Professional Labor Cost Budget Roberts and Chou, CPAs, offer three types of serv

Question

Professional Labor Cost Budget

Roberts and Chou, 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, 2014:

Based on the data provided above and assuming that the average compensation per hour for staff is $60 and for partners is $155, prepare a professional labor cost budget for each department for Roberts and Chou, CPAs, for the year ending December 31, 2014.

Billable Hours Audit Department: Staff 34,900 Partners 5,200 Tax Department: Staff 26,500 Partners 3,300 Small Business Accounting Department: Staff 4,200 Partners 600

Explanation / Answer

                                               Roberts and Chou, CPAs

                                          Professional Labour Cost Budget

                                      For the Year ending December 31, 2014

Particulars Staff Partners Audit Department Hours 34,900 5,200 Tax Department Hours 26,500 3,300 Small Business Accounting Department Hours 4,200 600 Total Hours 65,600 9,100 Average Compensation per Hour $ 60 $ 155 Total Profession Labor Cost, $ 3,936,000 $ 1,410,500

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