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:

Modeling Job

Employment in the field of fashion or advertisement where individuals showcase clothing, accessories, or other products.

Consumer Price Index

An indicator that measures the average change over time in the prices paid by consumers for a basket of goods and services.

Base Year

A specific year against which economic growth or other economic indicators are measured, serving as a comparison for subsequent years' data.

Unemployed

Individuals who are actively seeking employment but are unable to find work.