Cray-Z Consultants provides management accounting advice to not-for-profit firms
ID: 2639240 • Letter: C
Question
Cray-Z Consultants provides management accounting advice to not-for-profit firms. It employs three levels of consultants, based on experience and education: partner, senior, and associate. When Cray-Z considers bidding on jobs, it estimates the costs using a set of standardized billing rates. It then adds an estimate for travel, supplies, and so on (referred to as miscellaneous cost ). Next it applies a percentage to the total of consultant cost and miscellaneous cost for general and administrative (G&A) expense. The estimates for each of these elements are shown below:
Partner cost (per hour) $500
Senior cost (per hour) $200
Associate cost (per hour) $90
G&A factor 180%
Required:
Rock City Museum (a not-for-profit) has approached Cray-Z for consulting services. The senior partner at Cray-Z estimates that the work will require 55 partner-hours, 210 senior hours,and 850 associate-hours. She estimates miscellaneous costs to be $27,000. What is the estimated cost of the consulting job, based on these estimates?
Partner cost _______________
Senior cost _______________
Associate cost _______________
Miscellaneous cost _______________
Estimated consultant & miscellaneous cost ______________
G&A cost _______________
Estimated costs _______________
Explanation / Answer
Chart provided below:
Rates Hours Total Partner $500 $55.00 $27,500.00 Senior $200 $210.00 $42,000.00 Associate $90 $850.00 $76,500.00 Misc - $27,000.00 $27,000.00 G&A 180% - $311,400.00 $484,400.00 Grand Total