The following information has been gathered for Catalyst Legal Services for its fiscal year ending December 31:
$$\begin{array} { l r }
\text { Actual office overhead costs } & \$ 1,275,500 \
\text { Actual billable labor hours } & 44,600 \
\text { Actual billable labor costs } & \$ 3,960,000 \
\text { Estimated office overhead costs } & \$ 1,080,000 \
\text { Estimated billable labor hours } & 48,000\
\text { Estrmated billable labor costs } & \$ 4,320,000
\end{array}$$
-
What is the predetermined office overhead rate per billable labor hour?
A) $28.60.
B) $26.57.
C) $22.50.
D) $24.22.

Question

The following information has been gathered for Catalyst Legal Services for its fiscal year ending December 31:
$$\begin{array} { l r } 
\text { Actual office overhead costs } & \$ 1,275,500 \
\text { Actual billable labor hours } & 44,600 \
\text { Actual billable labor costs } & \$ 3,960,000 \
\text { Estimated office overhead costs } & \$ 1,080,000 \
\text { Estimated billable labor hours } & 48,000\
\text { Estrmated billable labor costs } & \$ 4,320,000
\end{array}$$
-
What is the predetermined office overhead rate per billable labor hour?
A) $28.60.
B) $26.57.
C) $22.50.
D) $24.22.

Quizplus · Accepted Answer

The predetermined office overhead rate is calculated by dividing the estimated office overhead costs by the estimated billable labor hours: $1,080,000 / 48,000 hours = $22.50 per hour.

The Following Information Has Been Gathered for Catalyst Legal Services