Roberts and Chou, CPAs, offer three types of services to clients: auditing, tax,
ID: 2527845 • Letter: R
Question
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, 2016:
The average billing rate for staff is $125 per hour, and the average billing rate for partners is $245 per hour.
Prepare a professional fees earned budget for Roberts and Chou, CPAs, for the year ending December 31, 2016.
Billable Hours Audit Department: Staff 33,200 Partners 5,000 Tax Department: Staff 24,600 Partners 3,100 Small Business Accounting Department: Staff 4,600 Partners 600Explanation / Answer
Answers
Roberts and Chou, CPAs
Professional Fees Earned Budget
For the Year Ending December 31, 2016
Billable Hours (1)
Hourly Rate (2)
Total Revenue (1 x 2)
Audit Department:
Staff
33200
$ 125.00
$4150000
Partners
5000
$ 245.00
$1225000
Total (A)
$5,375,000
Tax Department:
Staff
24600
$ 125.00
$3075000
Partners
3100
$ 245.00
$759500
Total (B)
$3,834,500
Small Business Accounting Department:
Staff
4600
$ 125.00
$575000
Partners
600
$ 245.00
$147000
Total (C)
$722,000
Total professional fees earned (A+B+C)
$9,931,500
Roberts and Chou, CPAs
Professional Fees Earned Budget
For the Year Ending December 31, 2016
Billable Hours (1)
Hourly Rate (2)
Total Revenue (1 x 2)
Audit Department:
Staff
33200
$ 125.00
$4150000
Partners
5000
$ 245.00
$1225000
Total (A)
$5,375,000
Tax Department:
Staff
24600
$ 125.00
$3075000
Partners
3100
$ 245.00
$759500
Total (B)
$3,834,500
Small Business Accounting Department:
Staff
4600
$ 125.00
$575000
Partners
600
$ 245.00
$147000
Total (C)
$722,000
Total professional fees earned (A+B+C)
$9,931,500
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