A Local Accounting Firm Employs 28 Full-Time Professionals

question 100

Multiple Choice

A local accounting firm employs 28 full-time professionals. The budgeted annual compensation per employee is $41,000. The average chargeable time is 430 hours per client annually. All professional labor costs are included in a single direct-cost category and are allocated to jobs on a per-hour basis.
Other costs are included in a single indirect-cost pool, allocated according to professional labor-hours. Budgeted indirect costs for the year are $787,000, and the firm expects to have 95 clients during the coming year.
What is the budgeted indirect-cost rate per hour?

• A) $6.86 per hour
• B) $65.37 per hour
• C) $28.10 per hour
• D) $19.27 per hour

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Definitions:

Income Distribution

The way in which total income is shared among individuals or groups within an economy, impacting economic equality.

Labor Market Discrimination

The unfair treatment of workers based on race, gender, age, or other non-job-related characteristics, affecting hiring, wages, and promotion.

Nation's GDP

The total monetary or market value of all the finished goods and services produced within a country's borders in a specific time period.

Specialization

A production strategy where a business or country focuses on producing a limited range of goods or services to gain greater degrees of productive efficiency within an overall system.