Superior Services,Inc

question 45

Multiple Choice

Superior Services,Inc.is a consulting firm that offers optimal legal solutions.It allocates indirect costs using a single predetermined overhead allocation rate with direct labor hours as the allocation base.The estimated indirect costs for this year amount to $160,000.The company is expected to work 8000 direct labor hours during the year.The direct labor rate is $300 per hour.Clients are billed at 120% of direct labor cost.Last month,Superior's consultants spent 180 hours on Xyme,Inc.What is the predetermined overhead allocation rate per direct labor hour? (Round your final answer to the nearest whole dollar.)

• A)$533 per hour
• B)$20 per hour
• C)$889 per hour
• D)$27 per hour

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Definitions:

Total Revenue

The entirety of income a company secures from its sales or service activities over a certain period.

Total Cost

The sum of all costs incurred by a firm in producing a certain level of output.

Monopolistically Competitive

Describes a market structure where many companies sell products that are similar but not identical, allowing for significant competition but with some degree of pricing power.

Total Revenue

The overall amount of money earned by a firm from the sale of its goods and services, before any costs are deducted.