Question

Cray-Z Consultants provides management accounting advice to not-for-profit-firms. It employs three levels of consultants, based on experience and education: partner, senior, and associate. When Cray-Z considers bidding on jobs, it estimates the costs using a set of standardized billing rates. It then adds an estimate for travel, supplies, and so on (referred to as miscellaneous cost). Next it applies a percentage to the total of consultant cost and miscellaneous cost for general and administrative (G&A) expense. The estimates for each of these elements are shown below:
Partner cost (per hour) . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 600
Senior cost (per hour) . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 250
Associate cost (per hour) . . . . . . . . . . . . . . . . . . . . . . . . . $ 75
G&A factor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150%

Required
Rock City Museum (a not-for-profit) has approached Cray-Z for consulting services. The senior partner at Cray-Z estimates that the work will require 20 partner-hours, 175 senior- hours, and 500 associate-hours. She estimates miscellaneous costs to be $20,000. What is the estimated cost of the consulting job, based on these estimates?



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  • CreatedDecember 18, 2013
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