Use the following information for questions
Carlos Consulting Inc. provides financial consulting and has collected the following data for the next year's budgeted activity for a lead consultant. $$\begin{array} { c l }
\text { Consultants' wages } & \$ 90,000 \
\text { Fringe benefits } & \$ 22,500 \
\text { Related overhead } & \$ 17,500 \
\text { Supply clerk's wages } & \$ 18,000 \
\text { Fringe benefits } & \$ 4,000 \
\text { Related overhead } & \$ 20,000 \
\text { Profit margin per hour } & \$ 20 \
\text { Profit margin on materials } & 15 \% \
\text { Total estimated consulting hours } & 5,000 \
\text { Total estimated material costs } & \$ 168,000
\end{array}$$
-A consulting job takes 20 hours of consulting time and $180 of materials. The client's bill would be
A) $1,172.
B) $772.
C) $952.
D) $1,100.

Question

Use the following information for questions 
Carlos Consulting Inc. provides financial consulting and has collected the following data for the next year's budgeted activity for a lead consultant. $$\begin{array} { c l } 
\text { Consultants' wages } & \$ 90,000 \
\text { Fringe benefits } & \$ 22,500 \
\text { Related overhead } & \$ 17,500 \
\text { Supply clerk's wages } & \$ 18,000 \
\text { Fringe benefits } & \$ 4,000 \
\text { Related overhead } & \$ 20,000 \
\text { Profit margin per hour } & \$ 20 \
\text { Profit margin on materials } & 15 \% \
\text { Total estimated consulting hours } & 5,000 \
\text { Total estimated material costs } & \$ 168,000
\end{array}$$
-A consulting job takes 20 hours of consulting time and $180 of materials. The client's bill would be
A) $1,172.
B) $772.
C) $952.
D) $1,100.

Quizplus · Accepted Answer

The client's bill is calculated by adding the consulting fees, material costs plus profit on materials, and the profit margin per hour. Consulting fees are calculated by determining the cost per hour, which includes consultants' wages, fringe benefits, related overhead, supply clerk's wages, fringe benefits, related overhead, and dividing by the total estimated consulting hours. Then, multiply by the number of consulting hours for the job. Material costs include the cost of materials plus the profit margin on materials.1. Total costs (excluding profit margins) = Consultants' wages + Fringe benefits + Related overhead + Supply clerk's wages + Fringe benefits + Related overhead + Material costs   = $90,000 + $22,500 + $17,500 + $18,000 + $4,000 + $20,000 + $168,000   = $340,0002. Total consulting costs (excluding materials and profit) = Consultants' wages + Fringe benefits + Related overhead + Supply clerk's wages + Fringe benefits + Related overhead   = $90,000 + $22,500 + $17,500 + $18,000 + $4,000 + $20,000   = $172,0003. Cost per consulting hour = Total consulting costs / Total estimated consulting hours   = $172,000 / 5,000 hours   = $34.4 per hour4. Consulting fee for the job = Cost per consulting hour * Number of consulting hours for the job   = $34.4 * 20 hours   = $6885. Material cost for the job = Actual material cost + (Profit margin on materials * Actual material cost)   = $180 + (15% of $180)   = $180 + $27   = $2076. Profit margin for the job = Profit margin per hour * Number of consulting hours for the job   = $20 * 20 hours   = $4007. Total bill to the client = Consulting fee for the job + Material cost for the job + Profit margin for the job   = $688 + $207 + $400   = $1,295However, there seems to be a discrepancy in my calculation based on the provided options. Given the options, let's correct the approach focusing on the components provided:- Consulting fee for 20 hours: 20 hours * $34.4/hour (from the calculation above) = $688 (This was the calculation for the cost per hour, but let's adjust our understanding based on the options provided and the structure of the question.)- Material cost plus profit: $180 + ($180 * 15%) = $207- Profit for 20 hours: 20 hours * $20/hour = $400Given the options and re-evaluating the calculation process, it seems there was an error in my initial detailed explanation. The correct approach should directly apply the profit margin and material markup to the given costs without recalculating the entire structure, focusing on the direct costs and profit associated with the job:- Consulting fee for 20 hours: Not directly calculable from the given data without assuming a direct cost per hour.- Material cost plus profit: $180 + 15% profit on materials.- Profit for 20 hours: 20 hours * $20/hour.Given the misunderstanding in the calculation process and the options provided, the correct calculation should directly reflect the job's direct costs and profits without the need for dividing the total costs by the hours, which was incorrectly applied in my detailed explanation. The correct answer should be based on the structure of the question and the options provided, focusing on the direct billing components: consulting time, materials, and profit margins.

Use the Following Information for Questions Carlos Consulting Inc

Use the Following Information for Questions
Carlos Consulting Inc