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 2011 bills for two clients.
the hours of professional time spent on each client are as follows:
professionnal san antonio dominion amsterdam enterprises
wilmer 21 3
bennet 4 11
amesbury 30 41
total 55 55
1. what amounts did wg bill to san antonio dominion and amsterdam enterprises for may?
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? 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?