Saber Promotional Services uses a job order system for costing and billing promotional services for dance and ballet performances.Saber has four public relations specialists and office staff.At the beginning of the year,Saber estimated the total cost of salaries and benefits for the public relations specialists at $403,800 and a total of 7100 billable hours for the year.The office and administrative costs were estimated at $676,000.The allocation base for office and administrative costs is billable hours.What rate would Saber use for allocating the cost of its office and administrative staff? (Round your answer to the nearest cent.)

Question

Quizplus · Accepted Answer

The correct answer is A.The allocation rate for office and administrative costs is calculated by dividing the estimated total cost of these costs by the estimated total billable hours. In this case, the estimated total cost of office and administrative costs is $676,000 and the estimated total billable hours are 7100. Therefore, the allocation rate is $676,000 / 7100 = $95.21 per hour.

Saber Promotional Services Uses a Job Order System for Costing