An Accounting Firm Is Setting the Audit Fee for a Proposed

question 11

Multiple Choice

An accounting firm is setting the audit fee for a proposed engagement.The budgeted direct professional labor hours are 100 hours at a rate of $100 per hour.Indirect costs are budgeted at 200% of the direct professional labor cost.Travel costs are budgeted at $20,000.If the markup is 100% of total budgeted costs,what is the audit fee?

• A) $30,000
• B) $50,000
• C) $100,000
• D) $640,000

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Definitions:

Coupling Ratio

in engineering, refers to the relationship between the input and output of a system, such as in transformers or gear ratios.

Fluid Couplings

A hydrodynamic device used to transmit rotating mechanical power; it has been used in automobile transmissions as a replacement for a mechanical clutch.

Torque Converter

A fluid coupling device that is used to transfer rotating power from a prime mover, like an engine, to a rotating driven load.

Vortex Flow

A flow pattern characterized by the rotation of fluid in a circular path around an axis.