Question

Homework: Chapter 5 - Homework A Score: 0 of 1 pt 2 of 5 (1 complete) E5-20 (book/static) HW Score: 20%, 1 of 5 pts Question Help The Walliston Group (WG) provides tax advice to multinational firms. WG has just prepared the May 2017 bills for two dients. The hours WG charges clients for (a) direct professional time (at an hourly rate) of professional time spent on each client are as follows: and (b) support services (at 30% of the direct professional costs (Click the icon to view the hours by client.) billed). The three professionals in WG and their rates per professional hour are as follows: Read the requirements BEE (Click the icon to view the hourly rates.) Requirement 1. What amounts did WG bill to San Antonio Dominion and Amsterdam Enterprises for May 2017? Determine the formula needed to calculate the total cost per professional for each client when WG allocates support costs at 30% of direct professional costs. _) - Cost per professional 0 Requirements 1. What amounts did WG bill to San Antonio Dominion and Amsterdam Enterprises for May 2017? 2. Suppose support services were billed at $75 per professional labor hour (instead of 30% of professional labor costs). How would this change affect the amounts WG billed to the two clients for May 2017? Comment on the differences between the amounts billed in requirements 1 and 2 3. How would you determine whether professional labor costs or professional labor hours is the more appropriate allocation base for WG's support services? Choose from any Print Done SSK 7 parts remaining Clear All Check Answer

Answer 1

clinet Dorect Professional Time Support Service Rate Per No. of Total Rate Total Hour (2) Howrs (3) (4) = (2)X (3) 15) (6)=(4) X(3 Amount Bille (6) =(4) X(5) client. (7)=(+62 90 SAN ANTONIO DOMINION Walliston Boutin Abbington $16,640 301 1100 30 $4,992 $21632 330 1,450 220 100 3,900 30 1170 507 $28132 AMSTERDAM ENTERPRISES Walliston Boutin $ 640 1 4 $9.560 30% 220 30 $768 $3,328 924 4,004 1560 6,760 $14092 Abbington 100 5,200/30

J Walliston Direct Professional Time Support service TU=(x(3) 5 6-4JXC5) (7)=6+16 SAN ANTONIO DOMINION Walliston $640 26 $16,640 $75 $1950 $18,590 Boutin 220 | 1100 75 1375 | 1,475 | 100 Abbington 39 3900 75 2925 6,895 $ 26,890 AMSTERDAM ENTERPRISES $640 $2560 $ 75 |$300 $2860 220 14 3080 75 11050 4,130 Boutin 100 sa 5200 Abbington 75 $16,090 San Antonio Dominion Requirementi Requirment 2 Dominion $ 28,132 Amesterdam Enterpruses $ 26,890 14,092 16,090 . $42,224 Both clients use $ 42 980 to hours of professional labor time Antonio Dominion wes a higher proportion of walliston's time (26 ho How evers hich is more costly. This altraits the highest Rodge when allocated on the basis of support services direct professional labor | 3900 9, 100 over san