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

question 7

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.Clients are billed at 140% of direct labor cost.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: The predetermined overhead allocation rate for travel will be ________.

• A)$40.74 per mile
• B)$38.00 per mile
• C)$78.74 per mile
• D)$250 per mile

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Definitions:

Positively Skewed

Describes a distribution of values where the longer tail is on the right side, often with a concentration of data towards the lower end.

Distribution

Refers to the way in which something is shared or spread out across a range or area, especially the arrangement of a statistical data set.

Negatively Skewed

A distribution of data where the tail on the left side of the distribution is longer or fatter than the right side, indicating that the bulk of the values lie to the right of the mean.

Distribution

The way in which something is shared out among a group or spread over an area, also used in statistics to describe the spread of values in a dataset.