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Summit Financial Advisors provides accounting and finance assistance to customers in the retail business. During July, Summit’s professionals spent 41 hours on their client. What is the total amount of cost that Summit will record for the client for the month? (Round any intermediate calculations to the nearest cent, and your final answer to the nearest dollar.)

a. $7,741
b. $8,280
c. $9,012
d. $10,204

User DomincJune
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Final answer:

Without the hourly rate Summit charges, it is not possible to determine the total cost for the client based on 41 hours of service. More information is necessary to complete this calculation.

Step-by-step explanation:

To determine the total amount of cost that Summit Financial Advisors will record for the client for the month, we must first calculate the total explicit costs based on the information provided. The given explicit costs are the office rental and law clerk's salary, which total to $85,000. However, to find the cost per hour that Summit charges, more information is needed such as the hourly rate Summit's professionals charge. Without this rate, we cannot calculate the cost for the 41 hours of service provided to the client. The examples provided do not contain enough details to complete the calculation. Therefore, we cannot accurately select an option from a. $7,741 b. $8,280 c. $9,012 d. $10,204 as the total cost for the client for July.

Nevertheless, if we consider the method to find the accounting profit from the last example, it would be by subtracting the explicit costs from the revenue. For instance, if the firm's revenue was $200,000 and explicit costs were $85,000, the accounting profit would be $200,000 - $85,000 = $115,000.

User Vitaliy Terziev
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