Legal Beagles offers a variety of legal services. They have three support activi

Question

Legal Beagles offers a variety of legal services. They have three support activities - investigations, secretarial and research. The following data has been collected over the past month. The lawyers had 1,244 billable hours over this time period. Direct labor costs are $100 per hour. The staffing capacity for support activities is determined by the estimated billable hours. If a single volume-based cost driver is used what will be the most likely rate used to assign the costs of support activities? (round your answer to the nearest dollar.)

a. $100
b. $50
c. $125
d. $65
e. None of the above is correct.

2.Legal Beagles offers a variety of legal services. They have three support activities - investigations, secretarial and research. The following data has been collected over the past month. The lawyers had 1,244 billable hours over this time period. Direct labor costs are $100 per hour. The staffing capacity for support activities is determined by the estimated billable hours. If investigation hours, secretarial hours, and inspections respectively are used as activity-based cost drivers what will be the most likely cost driver rate used to assign the costs of support activities? The cost drivers costs are ordered below for investigation, secretarial and inspections.

a. $100, $12, $65
b. $50, $15, $65
c. $100, $12, $50
d. $100, $12, $60
e. None of the above.

3.Legal Beagles offers a variety of legal services. They have three support activities - investigations, secretarial and research. The following data has been collected over the past month. The lawyers had 1,244 billable hours over this time period. Direct labor costs are $100 per hour. The staffing capacity for support activities is determined by the estimated billable hours. For a recent case ten hours of investigation services, five secretarial hours, two inspections and twenty billable lawyer hours were recorded. Using activity-based costing and the previous information what are the costs of this case?

a. $3,190
b. $4,000
c. $1,190
d. $2,000
e. None of the above is correct.

Support Activities Resource Costs Activity Volumes Investigation $50,000 500 Investigation Hours Secretarial $5,760 480 Secretarial Hours Research $6,500 100 Inspections

Explanation / Answer

1.50 (50000+5760+65000)/1244 2.100 12 65 50000/500 5760/480 6500/100 3.3190 100*10+12*5+65*2+100*20

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