Answer the Following Questions Using the Information Below

question 192

Multiple Choice

Answer the following questions using the information below:
A local accounting firm employs 20 full-time professionals. The budgeted annual compensation per employee is $40,500. The average chargeable time is 500 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 $787,500, and the firm expects to have 90 clients during the coming year.
-What is the budgeted indirect-cost rate per hour?

• A) $1,575.00 per hour
• B) $78.75 per hour
• C) $18.00 per hour
• D) $17.50 per hour

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Definitions:

Temporal Aggregation

The process of summarizing data over time to simplify analysis and detect patterns.

Rail

A mode of transportation that involves the movement of goods and passengers on tracks with trains.

Freight Transportation

The movement of goods and materials through various modes of transportation, such as trucks, ships, and trains.

Freight Bill

An invoice issued by a carrier detailing the charges applicable for the shipment of goods.