Johnson & Wright Consulting Services employs 6 senior consultants and 10 junior consultants. Budgeted annual salaries are $120,000 for each senior consultant and $60,000 for each junior consultant. Budgeted indirect costs (including office rent, administrative support, and equipment) are $576,000. The firm traces consultant time costs to each project and uses the total to allocate indirect costs. Calculate the amount of indirect cost that would be assigned to a project requiring $45,000 of senior consultant time and $38,000 of junior consultant time.

Johnson & Wright Consulting Services employs 6 senior consultants and 10 junior consultants. Budgeted annual salaries are $120,000 for each senior consultant and $60,000 for each junior consultant. Budgeted indirect costs (including office rent, administrative support, and equipment) are $576,000. The firm traces consultant time costs to each project and uses the total to allocate indirect costs. Calculate the amount of indirect cost that would be assigned to a project requiring $45,000 of senior consultant time and $38,000 of junior consultant time.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter5: Support Department And Joint Cost Allocation

Section: Chapter Questions

Problem 2CMA: Adam Corporation manufactures computer tables and has the following budgeted indirect manufacturing...

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