Solved

Hearthstone,Inc The Predetermined Overhead Allocation Rate for Travel Will Be ________

Question 112

Multiple Choice

Hearthstone,Inc.,a home healthcare firm,has been using a single predetermined overhead allocation rate with direct labor hours as the allocation base to allocate overhead costs.The direct labor rate is $200 per hour.Clients are billed at 190% of direct labor cost.Sofi Acosta,the president of Hearthstone,decided to develop an ABC system to more accurately allocate the indirect costs.She identified two activities related to the total indirect costs-travel and information technology (IT) support.The other relevant details are given below:  Activity  Allocation base  Estimated costs  Estimated quantity  of allocation base  Travel  Miles driven $85,0003000 miles  IT Support  Direct labor hours 60,0001300 DLH Total $145,000\begin{array} { | l | l | l | l | } \hline \text { Activity } & \text { Allocation base } & \text { Estimated costs } & \begin{array} { l } \text { Estimated quantity } \\\text { of allocation base }\end{array} \\\hline \text { Travel } & \text { Miles driven } & \$ 85,000 & 3000 \text { miles } \\\hline \text { IT Support } & \text { Direct labor hours } & \underline{60,000} & 1300 \mathrm {~ DLH } \\\hline \text { Total } & & \underline{\$ 145,000} & \\\hline\end{array} The predetermined overhead allocation rate for travel will be ________.(Round your answer to the nearest cent.)


A) $46.15 per mile
B) $28.33 per mile
C) $65.38 per mile
D) $48.33 per mile

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents