Refer to the AccuTax Incorporated exhibit Une of the partners is pla remaining partner, plans to add a manager at an annual salary of $91,800. She expects the manager to work, on average, 45 hours a week for 45 weeks per year. She plans to change the required staff time for each hour spent to complete a tax return to the following: Partner Manager Senior consultant Consultant Business Return. 0.4 hour 0.1 hour 0.5 hour Complex Individual Return 0.07 hour 0.13 hour 0.40 hour 0.40 hour Simple Individual Return 0.2 hour 0.8 hour The manager is salaried and earns no overtime pay. Senior consultants are salaried but receive time and a half for any overtime worked. The firm plans to keep all the senior consultants and adjust the number of consultants as needed including employing part- time consultants, who also are paid on an hourly basis. Higgins has also decided to have five supporting staff at $49,000 each. All other operating data remain unchanged. The manager will share 14% of any profit over $490,000 before bonus. Required: 1. What are the budgeted total cost for overtime hours worked by senior consultants? 2. How many full-time consultants should be budgeted? 3. Determine the manager's total compensation and total pretax operating income for the firm, assuming that the revenues from preparing tax returns remain unchanged.
Refer to the AccuTax Incorporated exhibit Une of the partners is pla remaining partner, plans to add a manager at an annual salary of $91,800. She expects the manager to work, on average, 45 hours a week for 45 weeks per year. She plans to change the required staff time for each hour spent to complete a tax return to the following: Partner Manager Senior consultant Consultant Business Return. 0.4 hour 0.1 hour 0.5 hour Complex Individual Return 0.07 hour 0.13 hour 0.40 hour 0.40 hour Simple Individual Return 0.2 hour 0.8 hour The manager is salaried and earns no overtime pay. Senior consultants are salaried but receive time and a half for any overtime worked. The firm plans to keep all the senior consultants and adjust the number of consultants as needed including employing part- time consultants, who also are paid on an hourly basis. Higgins has also decided to have five supporting staff at $49,000 each. All other operating data remain unchanged. The manager will share 14% of any profit over $490,000 before bonus. Required: 1. What are the budgeted total cost for overtime hours worked by senior consultants? 2. How many full-time consultants should be budgeted? 3. Determine the manager's total compensation and total pretax operating income for the firm, assuming that the revenues from preparing tax returns remain unchanged.
Chapter16: Accounting Periods And Methods
Section: Chapter Questions
Problem 3DQ
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Transcribed Image Text:Refer to the AccuTax Incorporated exhibit One of the partners is planning to retire at the end of the year. May Higgins, the sole
remaining partner, plans to add a manager at an annual salary of $91,800. She expects the manager to work, on average, 45 hours a
week for 45 weeks per year. She plans to change the required staff time for each hour spent to complete a tax return to the following:
Partner
Manager
Senior consultant
Consultant
Business Return
0.4 hour
0.1 hour
0.5 hour
Complex
Individual
Required 1
Return
0.07 hour
0.13 hour
0.40 hour
0.40 hour
Simple
Individual
Return
any overtime
The manager is salaried and earns no overtime pay. Senior consultants are salaried but receive time and a half for
worked. The firm plans to keep all the senior consultants and adjust the number of consultants as needed including employing part-
time consultants, who also are paid on an hourly basis. Higgins has also decided to have five supporting staff at $49,000 each. All
other operating data remain unchanged. The manager will share 14% of any profit over $490,000 before bonus.
Required 2 Required 3
0.2 hour
0.8 hour
Required:
1. What are the budgeted total cost for overtime hours worked by senior consultants?
2. How many full-time consultants should be budgeted?
3. Determine the manager's total compensation and total pretax operating income for the firm, assuming that the revenues from
preparing tax returns remain unchanged.
Complete this question by entering your answers in the tabs below.
What are the budgeted total cost for overtime hours worked by senior consultants?
Budgeted total cost for overtime
Required 2 >
4
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