?Rubio, Inc., a law consulting? firm, has been using a single predetermined over
ID: 2534338 • Letter: #
Question
?Rubio, Inc., a law consulting? firm, has been using a single predetermined overhead allocation rate with direct labor hours as the allocation base to allocate overhead costs. The direct labor rate is? $300 per hour. Clients are billed at? 160% of direct labor cost. Chandler? Massey, the president of? Rubio, decided to develop an ABC system to more accurately allocate the indirect costs. He identified two activities related to the total indirect
costslong dash—travel
and information technology? (IT) support. The other relevant details are given? below:
Activity
Allocation base
Estimated costs
Estimated quantity
of allocation base
Travel
Miles driven
????? $85,000
?1,500 miles
IT Support
Direct labor hours
?59,000
?1,250 DLH
Total
?$144,000
The predetermined overhead allocation rate for travel will be? ________. (Round your answer to the nearest? cent.)
A.
?$68.00 per mile
B.
?$56.67 per mile
C.
?$96.00 per mile
D.
?$47.20 per mile
Activity
Allocation base
Estimated costs
Estimated quantity
of allocation base
Travel
Miles driven
????? $85,000
?1,500 miles
IT Support
Direct labor hours
?59,000
?1,250 DLH
Total
?$144,000
Explanation / Answer
1 Predetermined overhead allocation rate Total estimated overhead costs/Total estimated quantity of the overhead allocation base 85,000/1,500 56.67 Ans 56.67 per mile
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.