Answer:
1. What is the hourly cost to Roth accounting of employing smith? Assume a 30-hour week and a 50-week year.
total number of labor hours per year = 30 per week x 50 weeks = 1,500 labor hours
cost per labor hour = $90,000 / 1,500 = $60
2. What direct labor cost would be assigned to Client 507 if smith works 15 hours to prepare client 507's financial statements?
total direct labor costs assigned to client 507 = 15 direct labor hours billed x $60 per direct labor hour = $900
