Luke employs 20 professional cleaners.Budgeted costs total $1,800,000 of which $1,550,000 is direct costs.Budgeted indirect costs are $750,000 and actual indirect costs were $795,800.Budgeted professional labor-hours are 1,000,000 and actual hours were 1,218,000.What is the budgeted direct cost-allocation rate?

Question

Quizplus · Accepted Answer

The budgeted direct cost-allocation rate is calculated by dividing the budgeted direct costs by the budgeted professional labor-hours: $1,550,000 / 1,000,000 hours = $1.55 per hour.

Luke Employs 20 Professional Cleaners