Dunby Inc.,a law consulting firm,has been using a single plantwide rate with direct labor hours as the allocation base to allocate overhead costs.The direct labor rate is $250 per hour.Chandler Massey,the president of Dunby,decided to develop an ABC system to accurately allocate the indirect costs.He identified two activities that amount to the total indirect costs- travel and information technology support.The other relevant details are given below: During the current month,Dunby's consultants spent 175 labor hours for Xyme Inc.The job required the professionals to travel 30 miles in total.Determine the total cost of the consulting job using the ABC system.
A)$43,750
B)$8,270
C)$7,130
D)$52,020

Question

Dunby Inc.,a law consulting firm,has been using a single plantwide rate with direct labor hours as the allocation base to allocate overhead costs.The direct labor rate is $250 per hour.Chandler Massey,the president of Dunby,decided to develop an ABC system to accurately allocate the indirect costs.He identified two activities that amount to the total indirect costs- travel and information technology support.The other relevant details are given below:  During the current month,Dunby's consultants spent 175 labor hours for Xyme Inc.The job required the professionals to travel 30 miles in total.Determine the total cost of the consulting job using the ABC system.
A)$43,750 
B)$8,270 
C)$7,130 
D)$52,020

Quizplus · Accepted Answer

The Answer of Dunby Inc.,a law consulting firm,has been using a single plantwide rate with direct labor hours as the allocation base to allocate overhead costs.The direct labor rate is $250 per hour.Chandler Massey,the president of Dunby,decided to develop an ABC system to accurately allocate the indirect costs.He identified two activities that amount to the total indirect costs- travel and information technology support.The other relevant details are given below:  During the current month,Dunby's consultants spent 175 labor hours for Xyme Inc.The job required the professionals to travel 30 miles in total.Determine the total cost of the consulting job using the ABC system.
A)$43,750 
B)$8,270 
C)$7,130 
D)$52,020

Dunby Inc,A Law Consulting Firm,has Been Using a Single Plantwide Rate