Brink Financial Advisors provides accounting and finance assistance to customers in the retail business

Question

Brink has four professionals on staff, plus an office with six clerical staff. Total compensation, including benefits, for the professional staff runs up to $800,000 per year, and normal billable hours are about 3,300 billable hours per year. The professional staff keep detailed time sheets organized by client number. The total office and administrative costs for the year are $270,000.
Brink allocates office and administrative costs to clients monthly, using a predetermined overhead allocation rate based on billable hours. During July, Brink's professionals spent 42 hours on their client, Waseca Sales. Brink adds a 30% markup on its costs to calculate the amount billed to the customer. How much gross profit did Brink earn from Waseca Sales in July? (Round any intermediate calculations to two decimal places, and your final answer to the nearest whole number.)
A) $13,618.08
B) $3,054.492
C) $3,436
D) $4,085

Answer 1

D .D) Gross profit is the mark-up charged on costs incurred.