Eastern, 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 $942500 of indirect costs this year, and she expects her firm to work 6500 direct labor hours. Eastern 's systems consultants provide direct labor at a rate of $ 300 per hour. Clients are billed at 170 % of direct labor cost. Last month, Eastern 's consultants spent 170 hours on Mckoy 's engagement.

Requirements

1. Compute Eastern 's predetermined overhead allocation rate per direct labor hour.

2. Compute the total cost assigned to the Mckoy engagement.

3. Compute the operating income from the Mckoy engagement.