Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Enlighten Services, Inc., a management consulting firm, has been using a single predetermined overhead allocation rate with direct labor hours as the allocation base to
Enlighten Services, Inc., a management 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 $50 per hour. Miriam Levy, the president of Enlighten, decided to develop an ABC system to accurately allocate the indirect costs. She identified two activities related to the total indirect costs travel and information technology (IT) support. The other relevant details are given below: Estimated Estimated quantity Activity Travel IT Support Total Allocation base Miles driven Direct labor hours costs $92,000 59,000 $151,000 of allocation base 1,500 miles 1,050 DLHr During the current month, Enlighten's consultants spent 125 labor hours for Malka, Inc. The job required the professionals to travel 300 miles in total. Determine the total cost of the consulting job using the ABC system. (Round any intermediate calculations to the nearest cent and your final answer to the nearest dollar.) O A. $7,024 O B. $2,810 O C. $31,673 O D. $6,250
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