Dunby, Inc is a consulting firm that offers optimal legal solutions. It allocates indirect costs using a single predetermined overhead allocation rate with direct labor hours as the allocation base. The estimated indirect costs for this year amount to $160,000. The company is expected to work 6,000 direct labor hours during the year. The direct labor rate is $200 per hour. Clients are billed at 120% of direct labor cost. Last month, Dunby's consultants spent 170 hours on Xyme, Inc What is the predetermined overhead allocation rate per direct labor hour?
A) $800 per hour
B) $27 per hour
C) $941 per hour
D) $30 per hour
B .B) Predetermined overhead allocation rate = Total estimated overhead costs / Total estimated quantity of the overhead allocation base = $160,000 / 6,000 direct labor hours = $27 per DL hour
Business
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Indicate whether this statement is true or false.
Business
Suppose you borrow money from your parents for college tuition on January 1, 2015. Your parents require four annual payments of $10,000 each, with the first payment due on January 1, 2019. They are charging you 6% annual interest. What is the cost of the college tuition?
A) $40,000 B) $29,094 C) $27,447 D) $15,939
Business