Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Southeast, Inc. is a technology consulting firm focused on Web site development and integration of Intemet business applications. The company has computed a predetermined overhead

image text in transcribed

Southeast, Inc. is a technology consulting firm focused on Web site development and integration of Intemet business applications. The company has computed a predetermined overhead allocation rate of $140 per direct labor hour. The president of Southeast suspects that her allocation of indirect costs could be giving misleading results, so she decides to develop an ABC system. She identifies three activities: documentation preparation, information technology support, and training. She figures that documentation costs are driven by the number of pages, information technology support costs are driven by the number of software applications used, and training costs are driven by the number of direct labor hours worked. Estimates of the costs and quantities of the allocation bases follow: (Click the icon to view the estimates.) Compute the predetermined overhead allocation rate for each activity. Round to the nearest dollar. Begin by selecting the formula to calculate the predetermined overhead (OH) allocation rate. Then enter the amounts to compute the allocation rate for each activity. (Round your answers to the nearest whole dollar. Abbreviation used: IT = information technology.) Predetermined OH Estimated overhead costs Estimated qty of the allocation base allocation rate = Document preparation Data Table Activity Estimated Cost Allocation Base $ Documentation preparation Information technology support Training 204,000 Pages 176,400 Applications used 459,600 Direct labor hours 840,000 Estimated Quantity of Allocation Base 6,000 pages 840 applications 5.700 hours $ Total indirect costs Print Done Enter any number in the edit fields and then click Check Answer. parts remaining Clear All Check

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered 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

Students also viewed these Accounting questions