Professional Labor Cost Budget for a Service Company Rollins and Cohen, CPAs, of
ID: 2405707 • Letter: P
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
40,200
Partners
6,000
Tax Department:
Staff
31,000
Partners
3,900
Small Business Accounting Department:
Staff
5,600
Partners
800
Based on the data provided above and assuming that the average compensation per hour for staff is $70 and for partners is $165, 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
$
$
Billable Hours
Audit Department:
Staff
40,200
Partners
6,000
Tax Department:
Staff
31,000
Partners
3,900
Small Business Accounting Department:
Staff
5,600
Partners
800
Explanation / Answer
Staff Partners Audit Department hours 40200 6000 Tax Department hours 31000 3900 Small Business Accounting Department hours 5600 800 Total hours 76800 10700 Average compensation per hour 70 165 Total professional labor cost 5376000 1765500
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