Refer to Exercises E19-24 and E19-25. Suppose Western’s direct labor rate was $280 per hour. The Halbert engagement used the following resources last month: 

Allocation Base                            Halbert

Direct labor hours.............................170

Pages...................................................310

Applications used ..............................80

Requirements 

1. Compute the cost assigned to the Halbert engagement, using the ABC system. 

2. Compute the operating income or loss from the Halbert engagement, using the ABC system.

Data from Exercises E19-24

Western, Inc. is a technology consulting firm focused on Web site development and integration of Internet business applications. The president of the company expects to incur $640,000 of indirect costs this year, and she expects her firm to work 4,000 direct labor hours. Western’s systems consultants provide direct labor at a rate of $280 per hour. Clients are billed at 160% of direct labor cost. Last month, Western’s consultants spent 170 hours on Halbert’s engagement.