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

question 31

Multiple Choice

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

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Definitions:

Property Owner

An individual or entity that holds legal title to a property, granting them certain rights such as use, control, disposal, and enjoyment.

Liability

The state of being legally responsible for something, such as a debt or obligation.

Equal Dignity Rule

A legal doctrine requiring that contracts authorizing someone to act on behalf of another must be in written form if the contract being executed also necessitates a written agreement.

Exceptions

Conditions or clauses in a contract, law, or regulation that allow for deviations from the general rule under specified circumstances.