Cost price system for an Accountantoffice

[Accountant007]

Hello,

I'm new to this forum and my English isn't perfect so excuse me for that.

For my study I have to make a standard price for an accountant office. At this moment they charge the customer the following way: hours x fare. However they want to change this to a standard price they can tell the customer before. What cost price method to divide the indirect cost is used often in the accountancy branche?
I know it's different for each company and that it depends on what the company wants. But I hope anyone can tell me this.

Looking forward to your answers.

 

[Fidget]

I don't think there is a best method for this. What you can do is decide what profit margin you want to get and factor in what it is that the client wants from you, then decide how much that's going to cost, apply your profit margin, and that's the price it's going to be to the client.

Or, for an established firm, there should be some numbers that you can crunch in respect of how much do you make in fees from providing certain types of service, and be able to use that as the basis for offering particular services at a flat rate.

But really, it all depends on what the demand is for the services that you're offering and what's involved in delivering them.

A fairly common strategy would be to work out how much each service can be provided for at its basic (and cheapest) and market them as available "from" that price. That way the price can legitimately be increased tailored to the clients' needs.

 

[Accountant007]

Thanks for your reaction Fidget!

The task has changed a bit.
Because there are many services provide by the office and there are a lot people working with a different salary and different hours a week it is impossible to make a standard price for a service.

So, what i have to figure out right now is the following thing.
What is the cost price of an employee? So I don't have to look what they are working on. But have to figure out what they cost for an hour. You could say that the employees are the product of the company. When the company knows what the cost of the employee are they think the can make a better estimate of the selling price.

The direct cost's are very clear but what method is the best to divide the indirect costs over the employee's?
It can't be 1 percentage for all the indirect cost. This wouldn't be fair because not everyone has the same hours a week. And when you dived the rent of the building over the hours people work it isn't fair either. Because even though some people work part-time the company still have to 'pay' for there space full-time.

Is there a method I can use to choose for every indirect cost a different percentage.

Can I use a method like the ABC method? of the Time Driven Activity Based Costing? or isn't this possible because there aren't activity's in the process? Because it is for school it has to be based of a method I can find in the literature!

Hope someone can give me some advice on this!