Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Smile dental office is in the process of changing their costing system. Their system currently uses a single direct cost pool (professional labour) and a

Smile dental office is in the process of changing their costing system. Their system currently uses a single direct cost pool (professional labour) and a single indirect cost pool (staff support). The direct categories in the new, refined costing system include: 1. Professional partner labour. Average total annual compensation of the two partners is $100,000; and, each partner has 2,000 hours of budgeted billable time. 2. Dental assistant labour. Average total annual compensation of the four assistants is $22,500 each, and each assistant has 2,000 hours of budgeted billable time. 3. Office staff. Average total annual compensation of the two staff members is $15,000 each, and each has 2,000 hours of budgeted billable time. The indirect category in the new refined costing system includes professional liability insurance. The budgeted indirect amount is $200,000, and the allocation base is budgeted professional labour hours. The dentist and dental assistants are considered professional labour hours. What would be the new budgeted direct cost rate if they decided to give all of the dental assistants a 10% raise?

Select one: a. $11.250 per hour b. $9.875 per hour c. $12.375 per hour d. $13.000 per hour e. $9.125 per hour

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing Corporate Surveillance Systems Research Methods For Greater Transparency

Authors: Isabel Wagner

1st Edition

1108837662, 978-1108837668

More Books

Students also viewed these Accounting questions