Use the Information Below to Answer the Following Question(s)

question 6

Multiple Choice

Use the information below to answer the following question(s) .A 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 is the budgeted indirect cost allocation rate per unit of the allocation base for the professional liability insurance?

• A)$16.67
• B)$25.00
• C)$1.67
• D)$26.67
• E)$12.50

---

Definitions:

Monarch

A sovereign head of state, especially one who inherits the position by right of birth, ruling a monarchy.

Colonial Population

Describes the inhabitants of a colony, including both the indigenous peoples and the settlers or administrators from the colonial power.

War of Jenkins's Ear

A conflict between Britain and Spain (1739-1748), named after an incident involving the severing of British Captain Jenkins' ear by Spanish coast guards, symbolizing broader colonial and trade tensions.

Hereditary Nobility

A social class in various countries historically conferred by a monarch or an existing regime, typically involving titles and privileges being passed down through bloodlines.