The Accounting Firm Firm of Smith & Jones LLC Has

The accounting firm firm of Smith & Jones LLC has a staff of 34 staff accountants and auditors and administrative staff. Budgeted total costs of the firm total $5,000,000 of which $2,900,000 is direct-labor costs. Assuming that the remaining costs are indirect and direct-labor cost is the allocation base, calculate the budgeted indirect cost rate.

A) 42% of direct-labor cost
B) 72% of direct-labor cost
C) 58% of direct-labor cost
D) 172% of direct-labor cost