Question

Roberts and Chou, CPAs, offer three types of services to clients: auditing, tax, and small business accounting. Based on experience and projected growth, the following billable hours have been estimated for the year ending December 31, 2016:

		Billable Hours
Audit Department:
	Staff	33,200
	Partners	5,000
Tax Department:
	Staff	24,600
	Partners	3,100
Small Business Accounting Department:
	Staff	4,600
	Partners	600

The average billing rate for staff is $125 per hour, and the average billing rate for partners is $245 per hour.

Prepare a professional fees earned budget for Roberts and Chou, CPAs, for the year ending December 31, 2016.

Roberts and Chou, CPAs
Professional Fees Earned Budget
For the Year Ending December 31, 2016
	Billable Hours	Hourly Rate	Total Revenue
Audit Department:
Staff		$	$
Partners
Total			$
Tax Department:
Staff		$	$
Partners
Total			$
Small Business Accounting Department:
Staff		$	$
Partners
Total			$
Total professional fees earned			$

Answer 1

• All working forms part of the answer

Roberts and Chou, CPAs
Professional Fees Earned Budget
For the Year Ending December 31, 2016
	Billable Hours (1)	Hourly Rate (2)	Total Revenue (1 x 2)
Audit Department:
Staff	33200	$            125.00	$4150000
Partners	5000	$            245.00	$1225000
Total (A)			$5,375,000
Tax Department:
Staff	24600	$            125.00	$3075000
Partners	3100	$            245.00	$759500
Total (B)			$3,834,500
Small Business Accounting Department:
Staff	4600	$            125.00	$575000
Partners	600	$            245.00	$147000
Total (C)			$722,000
Total professional fees earned (A+B+C)			$9,931,500