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Posted: August 16th, 2024
Computingindirect-costrates,jobcosting.Michel Scaramouche, the president of Tax-Assistance SA is examining alternative ways to calculate indirect-cost rates. He collects the following information from the budget for the year:●Budgeted variable indirect costs: â¬10 per hour of professional labour time●Budgeted fixed indirect costs: â¬50 000 per quarter.The budgeted billable professional labour-hours per quarter are:JanuaryâMarch 20 000 hours AprilâJune 10 000 hours JulyâSeptember 4 000 hours OctoberâDecember 6 000 hoursScaramouche pays all tax professionals employed by Tax-Assistance on an hourly basis (â¬30 per hour, including all fringe benefits).Tax-Assistanceâs job-costing system has a single direct-cost category (professional labour atâ¬30 per hour) and a single indirect-cost pool (office support that is allocated using profes- sional labour-hours).Tax-Assistance charges clients â¬65 per professional labour-hour.Required1 Calculate budgeted indirect-cost rates per professional labour-hour using:a Quarterly budgeted billable hours as the denominatorb Annual budgeted billable hours as the denominator.2 Calculate the operating profit for the following four customers using:a Quarterly-based indirect-cost ratesb An annual indirect-cost rate:●Jean-Baptiste Roquelin: 10 hours in February●Violette Leduc: 6 hours in March and 4 hours in April●Alphonse Dudet: 4 hours in June and 6 hours in August●Francine Leclerc: 5 hours in January, 2 hours in September and 3 hours inNovember.3 Comment on your results in requirement 2.
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