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:

WG has just prepared the May 2020 bills for two clients. The hours of professional time spent on each client are as follows:

Required

1. What amounts did WG bill to San Antonio Dominion and Amsterdam Enterprises for May 2020?
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 2020? 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’s support services?

Transcribed Image Text:

Professional Max Walliston Alexa Boutin Jacob Abbington Billing Rate per Hour $640 220 100