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Accounting
Pinnacle Consulting employs two CPAS, each having a different area of specialization. Judy specializes in tax consulting and Steve specializes in management consulting. Pinnacle expects to incur total overhead costs of $644,000 during the year and applies overhead based on annual salary costs. Judy is a senior partner, her annual salary is $310,000, and she is expected to bill 2,400 hours during the year. Steve is a senior associate, his annual salary is $150,000, and he is expected to bill 2,000 hours during the year. a. Calculate the predetermined overhead rate. Predetermined Overhead Rate b. Assuming that the hourly billing rate should be set to cover the total cost of services plus a 30% markup, compute the hourly billing rates for Judy and Steve. (Do not round Intermediate calculations. Round your answers to 2 decimal places.) Judy Steve Billing rate % per hour per hour

Pinnacle Consulting employs two CPAS, each having a different area of specialization. Judy specializes in tax consulting and Steve specializes in management consulting. Pinnacle expects to incur total overhead costs of $644,000 during the year and applies overhead based on annual salary costs. Judy is a senior partner, her annual salary is $310,000, and she is expected to bill 2,400 hours during the year. Steve is a senior associate, his annual salary is $150,000, and he is expected to bill 2,000 hours during the year. a. Calculate the predetermined overhead rate. Predetermined Overhead Rate b. Assuming that the hourly billing rate should be set to cover the total cost of services plus a 30% markup, compute the hourly billing rates for Judy and Steve. (Do not round Intermediate calculations. Round your answers to 2 decimal places.) Judy Steve Billing rate % per hour per hour

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Pinnacle Consulting employs two CPAS, each having a different area of specialization. Judy specializes in tax consulting and Steve specializes in management consulting. Pinnacle expects to incur total overhead costs of $644,000 during the year and applies overhead based on annual salary costs. Judy is a senior partner, her annual salary is $310,000, and she is expected to bill 2,400 hours during the year. Steve is a senior associate, his annual salary is $150,000, and he is expected to bill 2,000 hours during the year. a. Calculate the predetermined overhead rate Predetermined Overhead Rate b. Assuming that the hourly billing rate should be set to cover the total cost of services plus a 30 % markup, compute the hourly billing rates for Judy and Steve. (Do not round Intermediate calculations. Round your answers to 2 decimal places.) Judy Steve Billing rate %6 per hour per hour
Transcribed Image Text:Pinnacle Consulting employs two CPAS, each having a different area of specialization. Judy specializes in tax consulting and Steve specializes in management consulting. Pinnacle expects to incur total overhead costs of $644,000 during the year and applies overhead based on annual salary costs. Judy is a senior partner, her annual salary is $310,000, and she is expected to bill 2,400 hours during the year. Steve is a senior associate, his annual salary is $150,000, and he is expected to bill 2,000 hours during the year. a. Calculate the predetermined overhead rate Predetermined Overhead Rate b. Assuming that the hourly billing rate should be set to cover the total cost of services plus a 30 % markup, compute the hourly billing rates for Judy and Steve. (Do not round Intermediate calculations. Round your answers to 2 decimal places.) Judy Steve Billing rate %6 per hour per hour
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