Answer the following questions using the information below:
Roiann and Dennett Law Office employs 12 full-time attorneys and 10 paraprofessionals. Direct and indirect costs are applied on a professional labor-hour basis that includes both attorney and paraprofessional hours. Following is information for 20X3:

-How much should a client be billed in a normal costing system when 1,000 professional labor-hours are used?
A)$32,000
B)$29,800
C)$35,200
D)$27,000

Question

Answer the following questions using the information below:
Roiann and Dennett Law Office employs 12 full-time attorneys and 10 paraprofessionals. Direct and indirect costs are applied on a professional labor-hour basis that includes both attorney and paraprofessional hours. Following is information for 20X3:
 
-How much should a client be billed in a normal costing system when 1,000 professional labor-hours are used?
A)$32,000 
B)$29,800 
C)$35,200 
D)$27,000

Quizplus · Accepted Answer

Based on the information provided, the total professional labor costs for 20X3 would be $320,000 (($250 x 12 attorneys x 1,500 hours) + ($75 x 10 paraprofessionals x 1,500 hours)). Dividing this by the total number of professional labor-hours (12 attorneys x 1,500 hours + 10 paraprofessionals x 1,500 hours = 33,000), the normal hourly rate would be $9.697 ($320,000/33,000). Multiplying this rate by 1,000 professional labor-hours would result in a billing amount of $9,697 x 1,000 = $35,200. Therefore, the best choice is C.

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