Elite Consulting Ltd offers a range of immigration consulting services. The company’s service costing system estimates the cost of each consulting job by accumulating costs of the professional labour that works on the job plus a charge for overhead. The cost of professional labour is charged to jobs using the following three rates: Cost per hour Charge out rate for billing system Visa application $300 per hour $630 per hour Visa extension $75 per hour $350 per hour AAT appeal $225 per hour $1000 per hour The predetermined overhead rate is based on professional labour costs, which are budgeted to be $663600 for the current year. The estimated overhead costs for the current year are budgeted to be: Management salaries $850,000 Salaries of administration staff $285,000 Depreciation on IT hardware and software $240,000 Office supplies $2,250 Telecommunications $3,150 Insurance $150,000 Depreciation on office fixtures and fittings $11,250 Rent $100,000 Electricity $45,000 Council rates $23,300 During June the company provided three services, which consumed the following quantities of professional labour (in hours): Required: Client Visa application Visa Extension AAT Appeal Alfa 50 100 10 Beta 20 150 15 Gama 60 90 25 1) Calculate the predetermined overhead rate to be used at Elite Consulting Ltd. 2) Calculate the cost of the three services. 3) Assume Elite Consulting Ltd uses a billing system with the charge out rates shown above. Calculate the client fees for each of the three services.
Elite Consulting Ltd offers a range of immigration consulting services. The company’s service costing
system estimates the cost of each consulting job by accumulating costs of the professional labour that
works on the job plus a charge for
The cost of professional labour is charged to jobs using the following three rates:
Cost per hour Charge out rate for billing system
Visa application $300 per hour $630 per hour
Visa extension $75 per hour $350 per hour
AAT appeal $225 per hour $1000 per hour
The predetermined overhead rate is based on professional labour costs, which are budgeted to be
$663600 for the current year. The estimated overhead costs for the current year are budgeted to be:
Management salaries $850,000
Salaries of administration staff $285,000
Office supplies $2,250
Telecommunications $3,150
Insurance $150,000
Depreciation on office fixtures and fittings $11,250
Rent $100,000
Electricity $45,000
Council rates $23,300
During June the company provided three services, which consumed the following quantities of professional
labour (in hours):
Required:
Client Visa application Visa Extension AAT Appeal
Alfa 50 100 10
Beta 20 150 15
Gama 60 90 25
1) Calculate the predetermined overhead rate to be used at Elite Consulting Ltd.
2) Calculate the cost of the three services.
3) Assume Elite Consulting Ltd uses a billing system with the charge out rates shown above.
Calculate the client fees for each of the three services.
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