the law firm of smith & jones has a staff of 32 lawyers and administrative staff

Question

the law firm of smith & jones has a staff of 32 lawyers and administrative staff. budgeted total costs of the firm total $4,200,000 of which $3,100,000 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.

The law firm of Smith & Jones has a staff of 32 lawyers and administrative staff. Budgeted total costs of the firm total $4,200,000 of which $3,100,000 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. OA, 74% of direct-labor cost OB, 135% of direct-labor cost C. 26% of direct-labor cost OD, 35% of direct-labor cost

Explanation / Answer

indirect labour cost= total-direct

=4,200,000-3,100,000= $1,100,000

Rate= 1100000/3100000=35%

Option D

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