Problem 11-8 (Part Level Submission) (a) Problem 11-8 (Part Level Submission) Se
ID: 2472999 • Letter: P
Question
Problem 11-8 (Part Level Submission)
(a)
Problem 11-8 (Part Level Submission)
Selzer & Hollinger, a low-cost legal firm, has set time standards for each of the two basic legal services it offers, which include the following:Attorney Time Paralegal Business incorporation 2.5 hours @ $130 per hour 4 hours @ $38 per hour Will preparation 1.5 hour @ $174 per hour 3 hours @ $26 per hour
Over the past month, Selzer & Hollinger has handled 34 business incorporations and 30 wills. Actual hours and costs follow:
Costs of Attorneys Costs of Paralegals Business incorporation 88 hours @ $144 average
attorney cost per hour 131 hours @ $36 average
paralegal cost per hour Will preparation 41 hours @ $169 average
attorney cost per hour 91 hours @ $30 average
paralegal cost per hour
Explanation / Answer
Standard (per business inco)
Standard (34 business inco)
Actual (34 business inco)
Business incorperation
Hours
Per hour rate
Total cost
Hours
Per hour rate
Total cost
Hours
Per hour rate
Total cost
Attorney time
2.5
130
325
85
130
11050
88
144
12672
Labour rate variance = (Actual rate - Standard rate) x Actual hours worked
= (144-130)*88
= 1232(U)
Labour efficiency variance = (Actual hours - Standard hours) x Standard rate
= (88-85)*130
= 390(U)
Standard (per business inco)
Standard (34 business inco)
Actual (34 business inco)
Business incorperation
Hours
Per hour rate
Total cost
Hours
Per hour rate
Total cost
Hours
Per hour rate
Total cost
Attorney time
2.5
130
325
85
130
11050
88
144
12672