Excersice 2-16.

Service Company use of Predetermined overhead rate [lo 4, 5, 6]

Smith and Baker Legal Services employs five full-time attorneys and nine paraprofessionals. Bud- geted salaries are $100,000 for each attorney and $50,000 for each paraprofessional. Budgeted indirect costs (e.g., rent, secretarial support, copying, etc.) are $210,000. The company traces the cost of attorney and paraprofessional time to each client and uses the total to assign indi- rect costs.

RequiRed:

What amount of indirect cost would be assigned if services to a client required $25,000 of attorney cost and $20,000 of paraprofessional cost? (Round overhead rate to 2 decimal places.)