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 dollar?
A) 118.10%.
B) 25.00%.
C) 32.21%.
D) 400.00%.

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 dollar?
A) 118.10%.
B) 25.00%.
C) 32.21%.
D) 400.00%.

Quizplus · Accepted Answer

The predetermined overhead rate is calculated by dividing the estimated overhead costs by the estimated billable labor costs: $1,080,000 / $4,320,000 = 0.25 or 25.00%.

The Following Information Has Been Gathered for Catalyst Legal Services