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Mendburg,Inc

question 25

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Mendburg,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 $100,000.The company is expected to work 5000 direct labor hours during the year.The direct labor rate is $250 per hour.Clients are billed at 130% of direct labor cost.Last month,Mendburg's consultants spent 175 hours on Curelli,Inc.Calculate the operating income from Curelli.


Definitions:

Earnings Per Share

A financial ratio that measures the amount of profit attributed to each outstanding share of common stock, indicating a company's profitability on a per-share basis.

Net Income

The total earnings of a company after subtracting all expenses from its total revenue, representing the profit or loss in a financial period.

Stockholders' Equity

The residual interest in the assets of a corporation after deducting its liabilities.

Account Balances

The amount of money in an account at any given time, which can reflect credits and debits from transactions.

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