Remmele and Little CPA\'s has decided to bid on the audit of Tanner, Inc. After
ID: 2346406 • Letter: R
Question
Remmele and Little CPA's has decided to bid on the audit of Tanner, Inc. After learning about the new client, they estimated the following:
All staff managers and partners are paid on average 30% of the desired client billing rate ($75,$125,$250). Fringe benefits average 30% of pay rate.Other out of pocket costs include supplies, travel,clerical and are fairly accurate.
Staff accountant hours 1500
Manager hours 200
Partner hours 100
Out of pocket costs(Estimate) $10,000
A. If the firm normally marked up nonlabor costs by 20% to arrive at the client fee what should the bid price be?
Explanation / Answer
Staff accountant hours 1500(1500*$75) $112,500 Manager hours 200(200*125) 25,000 Partner hours 100(100*250) 25,000 Clietn billinbg rates are $75, $125,$250 Fringe benefit 30% 33,750 7,500 7,500 146,250 32,500 32,500 Out of pocket cost $10,000 10,000 10,000 10,000 136,250 22,500 22,500 Normal labor cost 20% on clienet fee 27,250 4,500 4,500 Bid Price $111,000 $18,000 $18,000