Jamal, Kareem, Rashid and Associates Are in the Process of Evaluating

question 60

Multiple Choice

Jamal, Kareem, Rashid and Associates are in the process of evaluating its new client services for the business consulting division.
-Estate Planning, a new service, incurred $190,000 in development costs and employee training.
-The direct costs of providing this service, which is all labor, averages $29 per hour.
-Other costs for this service are estimated at $410,000 per year.
-The current program for estate planning is expected to last for two years. At that time, a new law will be in place that will require new operating guidelines for the tax consulting.
-Customer service expenses average $104 per client, with each job lasting an average of 450 hours. The current staff expects to bill 67,500 hours for each of the two years the program is in effect. Billing averages $49 per hour.
What is the estimated life-cycle operating income for the first two years?

• A) $6,615,000
• B) $1,658,800
• C) $924,400
• D) $734,400

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Definitions:

Public Attention

The focus or concern of the general populace, often drawn to significant events, controversies, or societal issues.

Polychlorinated Biphenyls

Toxic chemical compounds that are environmentally persistent and have been used in various industrial applications.

Superfund Statute

Federal law aimed at cleaning up sites contaminated with hazardous substances and pollutants; formally known as the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).

Strict Liability

A legal doctrine holding individuals or entities responsible for damages or harm caused by their actions, regardless of intent or negligence.