Dunby Inc.,a law consulting firm,has been using a single plantwide rate with direct labor hours as the allocation base to allocate overhead costs.The direct labor rate is $250 per hour.Clients are billed at 140% of direct labor cost.Chandler Massey,the president of Dunby,decided to develop an ABC system to accurately allocate the indirect costs.He identified two activities that amount to the total indirect costs-travel and information technology support.The other relevant details are given below: The predetermined overhead allocation rate for travel will be ________.
A)$40.74 per mile
B)$38.00 per mile
C)$78.74 per mile
D)$250 per mile

Question

Dunby Inc.,a law consulting firm,has been using a single plantwide rate with direct labor hours as the allocation base to allocate overhead costs.The direct labor rate is $250 per hour.Clients are billed at 140% of direct labor cost.Chandler Massey,the president of Dunby,decided to develop an ABC system to accurately allocate the indirect costs.He identified two activities that amount to the total indirect costs-travel and information technology support.The other relevant details are given below:  The predetermined overhead allocation rate for travel will be ________.
A)$40.74 per mile 
B)$38.00 per mile 
C)$78.74 per mile 
D)$250 per mile

Quizplus · Accepted Answer

The Answer of Dunby Inc.,a law consulting firm,has been using a single plantwide rate with direct labor hours as the allocation base to allocate overhead costs.The direct labor rate is $250 per hour.Clients are billed at 140% of direct labor cost.Chandler Massey,the president of Dunby,decided to develop an ABC system to accurately allocate the indirect costs.He identified two activities that amount to the total indirect costs-travel and information technology support.The other relevant details are given below:  The predetermined overhead allocation rate for travel will be ________.
A)$40.74 per mile 
B)$38.00 per mile 
C)$78.74 per mile 
D)$250 per mile

Dunby Inc,A Law Consulting Firm,has Been Using a Single Plantwide Rate