A local financial consulting firm employs 30 full-time employees. The budgeted compensation per employee is $ 50,000.The annual maximum chargeable time to each client is 1,000 hours. Clients always receive their full amount of time. All labour costs are included in a single direct-cost category and are traced to jobs on a per-hour basis.

Any other costs are included in a single indirect-cost pool, allocated according to professional labour-hours. Budgeted indirect costs for the year are $ 1,050,000, and the firm expects to have 60 clients during the coming year.

What is the budgeted indirect-cost rate per hour?

1. $35.00 per hour
2. $50.00 per hour
3. $1,050.00 per hour
4. $17.50 per hour (correct answer) Explanation Steps