Question

The Winter Group (WG) provides tax advice to multinational WG has just prepared the May 2017 bills for two clients. The firms. WG charges clients for (a) direct professional time (at hours of professional time spent on each client are as an hourly rate) and (b) support services (at 30% of the direct follows: professional costs billed). The three professionals in WG and 2(Click the icon to view the hours by client.) their rates per professional hour are as follows: (Click the icon to view the hourly rates.) Read the requirements Requirement 1. What amounts did WG bill to South Beach Dominion and Madrid 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. Direct professional labor + ( Direct professional labor X Support allocation rate Cost per professional Complete the table below to determine the amounts that WG billed to South Beach Dominion and Madrid Enterprises for May 2017. Begin with South Beach Dominion. South Beach Dominion Direct Amount Madrid Enterprises Direct Amount Professional Support Billed to Costs Costs Client Professional Support Billed to Costs Costs Client Matthew Winter Alberta Boutin Jerome Abott Total Requirement 2. Suppose support services were billed at $65 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. Determine the formula needed to calculate the total cost per professional for each client when WG allocates support costs at $65 per professional labor-hour. (Abbreviations used: hrs. = hours.) (1) (2) (3) Cost per professional Complete the table below to determine what WG would have billed to South Beach Dominion and Madrid Enterprises for May 2017 if support services were billed at $65 per professional labor-hour (instead of 30% of professional labor costs). Begin with South Beach Dominion. South Beach Dominion Direct Amount Madrid Enterprises Direct Amount Professional Support Billed to Costs Costs Client Billed to Professional Support Costs Costs Client Matthew Winter Alberta Boutin Jerome Abott Total

Answer 1

1				South beach dominion	Madrid enterprises
				Direct professional costs	Support costs	Amount billed to client	Direct professional costs	Support costs	Amount billed to client
				a	b=a*30%	c=a+b	d	e=d*30%	f=d+e
	Matthew winter			10920	3276	14196	1560	468	2028
				(21*520)			(3*520)
	Albrta boutin			600	180	780	1650	495	2145
				(4*150)			(11*150)
	Jerome abott			2400	720	3120	3280	984	4264
				(30*80)			(41*80)
	Total					18096			8437
2	(1). Direct professional labor
	(2). Direct hrs. by professional
	(3). Support cost per hour
				South beach dominion	Madrid enterprises
				Direct professional costs	Support costs	Amount billed to client	Direct professional costs	Support costs	Amount billed to client
				a	b	c=a+b	d	e	f=d+e
	Matthew winter			10920	1365	12285	1560	195	1755
				(21*520)	(21*65)		(3*520)	(3*65)
	Albrta boutin			600	260	860	1650	715	2365
				(4*150)	(4*65)		(11*150)	(11*65)
	Jerome abott			2400	1950	4350	3280	2665	5945
				(30*80)	(30*65)		(41*80)	(41*65)
	Total					17495			10065
	(4). Both clients use the same amount of professional labor time.
	(5). South beach dominion
	(6). More
	(7). The highest
3	(8). Gather more information by conducting interviews with personnel and analyzing tasks undertaken for certain clients