An Accounting Firm Completes an Audit for a Local Union

question 112

Essay

An accounting firm completes an audit for a local union and has the following cost information for the year.
Indirect labor $60,000
Office lease $22,000
Depreciation on office equipment $8,000
Marketing expense $20,000
Utilities $15,000
The firm's direct labor costs are budgeted at $500,000 for the year and overhead is allocated based on direct labor costs. The firm used 1 partner and 2 audit associates on the audit. Partners are paid $150 per hour while audit associates earn $50 per hour. The partner spent 6 hours on the engagement while the audit associates spent a total of 40 hours.
Required:
What is the cost of the audit?

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Definitions:

Concrete Words

Words that describe physical attributes, objects, or conditions, which are perceptible by the senses.

Strong, Precise Words

The use of powerful and exact language choices to convey messages more effectively and impactfully.

Nouns

Words that identify people, places, things, or ideas.

Concrete Words

Words that describe specific, identifiable things, people, or places, as opposed to abstract concepts.