Lancer Legal Services allocates overhead costs based on hours worked with different clients. The lawyer expects to have $250,000 in overhead during the year and expects to work on clients' cases 2,500 hours during the year. Additionally, she wants to pay herself $60 per hour for working with clients. In other words, the lawyer's billing rate is the sum of her hourly fee ($60) and a fee to recover the expected overhead spread over 2,500 hours. However, not all clients are billed this way some pay through contingency fees. For those clients, the lawyer receives 40% of any settlement. During the year, the lawyer works 1,600 hours that are billable to clients. The remaining hours are spent on contingency fee cases. The lawyer wins $400,000 in settlements for contingency clients, from which she receives 40%. The actual overhead for the year is $260,000. - What does the lawyer earn during the year after expenses?

Lancer Legal Services allocates overhead costs based on hours worked with different clients. The lawyer expects to have $250,000 in overhead during the year and expects to work on clients' cases 2,500 hours during the year. Additionally, she wants to pay herself $60 per hour for working with clients. In other words, the lawyer's billing rate is the sum of her hourly fee ($60) and a fee to recover the expected overhead spread over 2,500 hours. However, not all clients are billed this way some pay through contingency fees. For those clients, the lawyer receives 40% of any settlement. During the year, the lawyer works 1,600 hours that are billable to clients. The remaining hours are spent on contingency fee cases. The lawyer wins $400,000 in settlements for contingency clients, from which she receives 40%. The actual overhead for the year is $260,000. - What does the lawyer earn during the year after expenses?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter17: Activity Resource Usage Model And Tactical Decision Making

Section: Chapter Questions

Problem 6E: Elliott, Inc., has four salaried clerks to process purchase orders. Each clerk is paid a salary of...

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Elliott, Inc., has four salaried clerks to process purchase orders. Each clerk is paid a salary of 25,750 and is capable of processing as many as 6,500 purchase orders per year. Each clerk uses a PC and laser printer in processing orders. Time available on each PC system is sufficient to process 6,500 orders per year. The cost of each PC system is 1,100 per year. In addition to the salaries, Elliott spends 27,560 for forms, postage, and other supplies (assuming 26,000 purchase orders are processed). During the year, 25,350 orders were processed. Required: 1. Classify the resources associated with purchasing as (1) flexible or (2) committed. 2. Compute the total activity availability, and break this into activity usage and unused activity. 3. Calculate the total cost of resources supplied (activity cost), and break this into the cost of activity used and the cost of unused activity. 4. (a) Suppose that a large special order will cause an additional 500 purchase orders. What purchasing costs are relevant? By how much will purchasing costs increase if the order is accepted? (b) Suppose that the special order causes 700 additional purchase orders. How will your answer to (a) change?
Determine the gross pay for each employee listed below. a. Clay Jones is paid time-and-a-half for all hours over 40. He worked 45 hours during the week. His regular pay rate is 25 per hour. b. Mary James worked 48 hours during the week. She is entitled to time-and-a-half for all hours in excess of 40 per week. Her regular pay rate is 20 per hour. c. Lori Terry is paid a commission of 10 percent of her sales, which amounted to 23,650. d. Nicole Smiths yearly salary is 95,500. During the week, she worked 46 hours, and she is entitled to time-and-a-half for all hours over 40.
Markson and Sons leases a copy machine with terms that include a fixed fee each month plus acharge for each copy made. Markson made 9,000 copies and paid a total of $480 in January. In April, they paid $320 for 5,000 copies. What is the variable cost per copy if Markson uses the high-low method to analyze costs?
What does the lawyer earn during the year
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The chief estimator has asked you to determine the average hourly cost for equipnent operators using the information below.. The plan is to work 48 hours per week (8 hours Monday - Saturday). Overtime is paid for over 40 hours at a rate of Tirme and a half. Base Wage - $22.00 per hour Social Security Tax - 7.65% Unermployment Compensation Tax - 2.75% Worker Compensation Insurance $32.00/100 Public liability/Property Damage Insurance $3.10/100 Fringe Benefits $6.25 per hour
Godo Lawyer Sophia is paid a salary of $100,000 per year. The law firm expects her to spend 2,000 hours a year performing legal work for clients (50 weeks X 40 hours per week). Therefore, for job costing purposes, the law firm converts her annual salary to an hourly cost rate:
Jolly Cleaners offers residential and commercial cleaning services. Clients pay a fixed monthly fee for the service, but can cancel the service at the end of any month. In addition to the employees who do the actual cleaning, the firm includes two managers who handle the administrative tasks (human resources, accounting, and so on) and one dispatcher, who assigns the cleaning employees to jobs on a daily basis. On average, residential clients pay $320 per month for cleaning services and the commercial clients pay $1,800 per month. A typical residential client requires 10 hours a month for cleaning and a typical commercial client requires 40 hours a month. In March, Jolly Cleaners had 30 commercial clients and 160 residential clients. Cleaners are paid $15 per hour and are only paid for the hours actually worked. Supplies and other variable costs are estimated to cost $5 per hour of cleaning. Other monthly costs (all fixed) are $49,000 SG&A, including managerial and dispatcher…
Jessica Porter works in both the Jewelry department and the Cosmetics department of a retail store. Sheassists customers in both departments and arranges and stocks merchandise in both departments. The storeallocates her $30,000 annual wages between the two departments based on the time worked in the twodepartments in each two-week pay period. On average, Jessica reports the following hours and activitiesspent in the two departments. Allocate Jessica’s annual wages between the two departments.Activities HoursSelling in Jewelry department 51Arranging and stocking merchandise in Jewelry department . . . . . . . . . . . . . . 6Selling in Cosmetics department 12Arranging and stocking merchandise in Cosmetics department 7$7,500 to Idle time spent waiting for a customer to enter one of the departments . 4
Amy Andrews is a CPA who works as a managerial accounting consultant for a variety of firms. To determine her hourly rate, Amy uses a cost-plus pricing system, which she updates each year. The hourly cost of her assistant (including taxes and benefits) is $18, the hourly cost of her office space is $3, the hourly cost of her marketing and other overhead materials is $5, and Amy's own hourly salary (again, including taxes and benefits) is $84. Amy adds a 30% premium to her costs. What is her hourly rate using a cost-plus pricing strategy? 1:02 Multiple Choice $115 $143 $110 $140 Mc Graw MacBook Pro %23 %24 & 2 3 4 6 7 8. R. Y P D H J K V N mmand command option O O O