Engelhardt,Inc During the Current Month,Engelhardt's Consultants Spent 150 Labor Hours for Overhead

question 132

Multiple Choice

Engelhardt,Inc. ,a law consulting firm,has been using a single predetermined overhead allocation rate with direct labor hours as the allocation base to allocate overhead costs.The direct labor rate is $40 per hour.Ted Heath,the president of Engelhardt,decided to develop an ABC system to accurately allocate the indirect costs.He identified two activities related to the total indirect costs-travel and information technology (IT) support.The other relevant details are given below: $\begin{array}{|l|l|r|r|}\hline\text { Activity } & \text { Allocation base } & \text { Estimated costs } & \begin{array}{c}\text { Estimated quantity } \\\text { of allocation base }\end{array} \\\hline \text { Travel } & \text { Miles driven } & \$ 77,000 & 3,500 \mathrm{miles} \\\hline \text { IT Support } & \text { Direct labor hours } & \underline{55,000} & 1,250 \mathrm{DLH} \\\hline \text { Total } & & \$ 132,000,00 & \\\hline\end{array}$ During the current month,Engelhardt's consultants spent 150 labor hours for Cunningham,Inc.The job required the professionals to travel 400 miles in total.Determine the total cost of the consulting job using the ABC system.(Round any intermediate calculations to the nearest cent and your final answer to the nearest dollar. )

• A)$6,000
• B)$1,760
• C)$6,600
• D)$21,400

Understand the impact of sales mix on profitability and break-even analysis.

Analyze cost-volume-profit relationships to solve business problems.

Calculate the margin of safety in dollars and percentage to assess risk in sales projections.

Define and determine fixed, variable, semi-variable, and step costs.

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Definitions:

Nervous System

The part of an organism that coordinates its actions by transmitting signals to and from different parts of its body, including the brain, spinal cord, and nerves.

Psychoanalytic Tradition

A school of psychology originating from the work of Sigmund Freud, focusing on unconscious processes influencing behavior.

Repressed

A psychological condition where unwanted or distressing thoughts and memories are unconsciously blocked from conscious awareness.

Psychoanalysis

A therapeutic approach and theory of mind developed by Sigmund Freud, focusing on unconscious processes and childhood experiences as key factors influencing behavior and mental states.