Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Engelhardt, Inc., a law consulting firm, has been using a single predetermined overhead allocation rate with direct labor hours as the allocation base to allocate
Engelhardt, 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 $40 per hour. Ted Heath, the president of Engelhardt, decided to develop an ABC system to accurately allocate the indirect costs. He identified two activities related to the total indirect costs-travel and information technology (IT) support. The other relevant details are given below: Estimated quantity Estimated costs of allocation base Activity Travel IT Support ect labor hours Total Allocation base Miles driven $77,000 55,000 $132,000.00 3,500 miles 1,250 DLHr During the current month, Engelhardt's consultants spent 150 labor hours for Cunningham, Inc. The job required the professionals to travel 400 miles in total. Determine the total cost of the consulting job using the ABC system. O A. $6,600 B. $6,000 O C. $1,760 D. $21,400
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started