Refer to the AccuTax Incorporated exhibit One of the partners is planning to retire at the end of the year. May Higgins, the sole remaining partner, plans to add a manager at an annual salary of $92,400. She expects the manager to work, on average, 45 hours a week for 45 weeks per year. She plans to change the required staff time for each hour spent to complete a tax return to the following Complex Individual Return 0.07 hour Simple Individual Return Business Return Partner Manager 9.4 hour 0.1 hour 0.5 hour Senior consultant Consultant 0.13 hour 0.40 hour 0.40 hour 0.2 hour 0.8 hour The manager is salaried and earns no overtime pay. Senior consultants are salaried but receive time and a half for any overtime worked. The firm plans to keep all the senior consultants and adjust the number of consultants as needed including employing part- time consultants, who also are paid on an hourly basis. Higgins has also decided to have five supporting staff at $56,500 each. All other operating data remain unchanged. The manager will share 7% of any profit over $440,000 before bonus Required: 1. What are the budgeted total cost for overtime hours worked by senior consultants? 2. How many full-time consultants should be budgeted? 3. Determine the manager's total compensation and total pretax operating income for the firm, assuming that the revenues from preparing tax returns remain unchanged.
Refer to the AccuTax Incorporated exhibit One of the partners is planning to retire at the end of the year. May Higgins, the sole remaining partner, plans to add a manager at an annual salary of $92,400. She expects the manager to work, on average, 45 hours a week for 45 weeks per year. She plans to change the required staff time for each hour spent to complete a tax return to the following Complex Individual Return 0.07 hour Simple Individual Return Business Return Partner Manager 9.4 hour 0.1 hour 0.5 hour Senior consultant Consultant 0.13 hour 0.40 hour 0.40 hour 0.2 hour 0.8 hour The manager is salaried and earns no overtime pay. Senior consultants are salaried but receive time and a half for any overtime worked. The firm plans to keep all the senior consultants and adjust the number of consultants as needed including employing part- time consultants, who also are paid on an hourly basis. Higgins has also decided to have five supporting staff at $56,500 each. All other operating data remain unchanged. The manager will share 7% of any profit over $440,000 before bonus Required: 1. What are the budgeted total cost for overtime hours worked by senior consultants? 2. How many full-time consultants should be budgeted? 3. Determine the manager's total compensation and total pretax operating income for the firm, assuming that the revenues from preparing tax returns remain unchanged.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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please help. missing part 3 could you please explain as well
Transcribed Image Text:Refer to the AccuTax Incorporated exhibit One of the partners is planning to retire at the end of the year. May Higgins, the sole
remaining partner, plans to add a manager at an annual salary of $92,400. She expects the manager to work, on average, 45 hours a
week for 45 weeks per year. She plans to change the required staff time for each hour spent to complete a tax return to the following
Complex
Individual
Return.
0.07 hour
Simple
Individual
Return
Partner
Manager
Business Return
0.4 hour
0.1 hour
0.5 hour
0.13 hour
0.40 hour
Senior consultant
Consultant
0.2 hour
0.5 hour
0.40 hour
The manager is salaried and earns no overtime pay, Senior consultants are salaried but receive time and a half for any overtime
worked. The firm plans to keep all the senior consultants and adjust the number of consultants as needed including employing part.
time consultants, who also are paid on an hourly basis. Higgins has also decided to have five supporting staff at $56,500 each. All
other operating data remain unchanged. The manager will share 7% of any profit over $440,000 before bonus.
Required:
1. What are the budgeted total cost for overtime hours worked by senior consultants?
2. How many full-time consultants should be budgeted?
3. Determine the manager's total compensation and total pretax operating income for the firm, assuming that the revenues from
preparing tax returns remain unchanged.
Transcribed Image Text:Revenue
Payroll expenses:
Partner
Manager
Senior consultants-base pay
Senior consultants-pay for overtime hours
Consultants-Full-time
Consultants-Part-time
Support staff
General and administrative expenses
Operating income before bonus to manager
Less: Manager's bonus
Operating income before taxes
Total compensation for the manager:
Salary
Bonus
T-111
DONUS
Acculax Inc.
Budgeted Operating Income
For the Year ended December 31, 2022
$
Total
250,000
720,000
0
960,000
10,000
$
< Required 2
$ 3,840,000
$ 1,940,000
$ 1,900,000
$ 1,900,000
0
Required
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