The Meredith Company reported the following information.
Required:
Compute the Variable Indirect Cost Rate per Direct Professional Labor-Hour.

Question

Quizplus · Accepted Answer

B)High output month computation to Variable Indirect Cost Rate per Direct Professional Labor-Hour: [($50,000 / 3,400)] = $14.70
Low-output month computation to Variable Indirect Cost Rate per Direct Professional Labor-Hour: [($10,000 / 900)] = $11.11
The variable indirect-cost rate is the same in both the high-output months and the low-output months since variable indirect costs change in proportion to changes in direct professional labor-hours.
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The Meredith Company Reported the Following Information