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Atlantic, Inc. is a technology consulting rm focused on Web site development and integration of Internet business applications. The company has computed a predetermined overhead
Atlantic, Inc. is a technology consulting rm focused on Web site development and integration of Internet business applications. The company has computed a predetermined overhead allocation rate of $135 per direct labor hour. The president of Atlantic suspects that her allocation of indirect costs could be giving misleading results, so she decides to develop an ABC system. She identies three activities: documentation preparation, information technology support, and training. She gures that documentation costs are driven by the number of pages, information technology support costs are driven by the number of software applications used, and training costs are driven by the number of direct labor hours worked. Estimates of the costs and quantities ofthe allocation bases follow: @ (Click the icon to view the estimates.) Compute the predetermined overhead allocation rate for each activity. Round to the nearest dollar. Begin by selecting the formula to calculate the predetermined overhead (OH) allocation rate. Then enter the amounts to compute the allocation rate for each activity. (Round your answers to the nearest whole dollar. Abbreviation used: lT = information technology.) Predetermined OH allocation rate Data table Estimated Estimated Quantity of Activity Cost Allocation Base Allocation Base Documentation preparation $ 168,000 Pages 4,000 pages Information technology support 262,400 Applications used 820 applications Training Direct labor hours 7,200 hours M Total indirect costs jurs worked. Estim Actual overhead costs ) the nearest dollar Actual qty of the allocation base used Estimated overhead costs location rate. Then nation technology. Estimated qty of the allocation base
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