Darrius Travel Services provided the following information: Cost allocation rate for direct labour: $40 per hour
Cost allocation rate for indirect costs: $22 per hour
If Darrius receives $350 for a job requiring 5 hours of direct labour, they will make a profit of $40.

Question

Quizplus · Accepted Answer

The profit is calculated as follows:Revenue - (Direct labor cost + Indirect cost)= $350 - ($40 x 5 + $22 x 5)= $350 - $310= $40

Darrius Travel Services Provided the Following Information: Cost Allocation Rate