Consider the following budgeted data for the client case of Thanh Ng’s accounting firm. The client wants a fixed-price quotation.

Direct professional labour................................... $20,000
Direct support labour............................................. 10,000
Fringe benefi ts for direct labour.......................... 13,000
Photocopying............................................................. 2,000
Telephone calls.......................................................... 2,000
Computer lines.......................................................... 6,000

Overhead is allocated at the rate of 100% of direct labour cost.

REQUIRED

A. Prepare a schedule of the budgeted total costs for the client. Show subtotals for total direct labour costs and total costs as a basis for mark-up.
B. Assume that the partners’ policy is to quote a fi xed fee at 10% above the total costs. What fee would be quoted?
C. Explain why the listed estimates for costs might not be similar to the actual costs for the job. What factors could affect the accuracy of these estimates? List as many factors as you can.