A systems analyst is paid at the rate of $50/hour and will be needed for 40 hours. Her employer uses an overhead multiplier of 60% and does not factor in personal time. Her total direct labor cost that should be billed at:
A) $2,000.
B) $3,200.
C) $1,250.
D) $4,500.

Question

Quizplus · Accepted Answer

The analyst's total direct labor cost is calculated by multiplying her rate by the number of hours worked: $50/hour x 40 hours = $2,000. The employer's overhead multiplier is applied by multiplying the direct labor cost by 60%: $2,000 x 0.60 = $1,200. The total amount that should be billed is the sum of the direct labor cost and overhead: $2,000 + $1,200 = $3,200. Therefore, the best choice is B.

A Systems Analyst Is Paid at the Rate of $50/hour