An Accounting Firm Completes an Audit for a Local Union $\text { Required: }$

question 195

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.
$\text { Required: }$
What is the cost of the audit?

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Definitions:

Agriculture

The practice of cultivating the soil, growing crops, and raising livestock for food, fiber, fuel, and other products essential to human life and economic activity.

Mexico

A country located in the southern portion of North America, known for its rich cultural heritage, history, and as a popular tourist destination.

Andes

A major mountain range in South America, extending over seven countries and home to diverse cultures and historical civilizations.

Western Coast of Africa

The coastline along the Atlantic Ocean in West Africa, extending from Senegal to Angola, known for its rich history, including the transatlantic slave trade.