Alternative allocation bases for a professional services rm. The Walliston Group (WG) provides tax advice to multinational firms. WG charges clients for (a) direct professional time (at an hourly rate) and (b) support services (at 30% of the direct professional costs billed). The three professionals in WG and their rates per professional hour are as follows: ProfessionalBilling Rate per HourMax Walliston$640Alexa Boutin220Jacob Abbington100WG has just prepared the May 2017 bills for two clients. The hours of professional time spent on each clientare as follows:Hours per ClientProfessionalSan Antonio DominionAmsterdam EnterprisesWalliston264Boutin514Abbington3952Total70701. 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 professionallabor 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 moreappropriate allocation base for WG's support services?Required

Answered: Image /qna-images/answer/6b4d1f33-6ff0-4446-b041-c0c04491e5a1.jpg

Answered: Professional Billing Rate per Hour Max…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Concept explainers

Question

Alternative allocation bases for a professional services rm. The Walliston Group (WG) provides tax advice to multinational firms. WG charges clients for (a) direct professional time (at an hourly rate) and (b) support services (at 30% of the direct professional costs billed). The three professionals in WG and their rates per professional hour are as follows:

Professional
Billing Rate per Hour
Max Walliston
$640
Alexa Boutin
220
Jacob Abbington
100
WG has just prepared the May 2017 bills for two clients. The hours of professional time spent on each client
are as follows:
Hours per Client
Professional
San Antonio Dominion
Amsterdam Enterprises
Walliston
26
4
Boutin
5
14
Abbington
39
52
Total
70
70
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?
Required

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 4 steps with 12 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions