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Budgeted fixed indirect costs remain constant at $150,000 per month. During high-output months variable indirect costs are budgeted at $120,000, and during low-output months budgeted variable costs are $60,000. What are the respective high and low indirect cost rates if budgeted professional labour-hours are 6,000 for high-output months and 2,000 for low-output months?

A) $31.25 per hour, $87.50 per hour

B) $45.00 per hour, $95.00 per hour

C) $45.00 per hour, $105.00 per hour

D) $56.20 per hour, $105.00 per hour

E) $59.00 per hour, $105.00 per hour

Fixed costs remain constant at $200,000 per month. During high-output months variable costs are $160,000, and during low-output months variable costs are $40,000. What are the respective high and low indirect cost allocation rates if professional labour-hours are 8,000 for high-output months and 2,000 for low-output months?

A) $45.00 per hour; $120.00 per hour

B) $45.00 per hour; $45.00 per hour

C) $25.00 per hour; $20.00 per hour

D) $56.20 per hour; $120.00 per hour

E) $25.00 per hour; $100.00 per hour

A law office employs full-time attorneys and five paraprofessionals. For the current year indirect costs were budgeted at $225,000, but actually amounted to $350,000.

Direct and indirect costs are applied on a professional labour-hour basis which includes both attorney and paraprofessional hours. Total budgeted labour-hours were 25,000; however, actual labour-hours were 30,000.

What is the overhead applied to jobs if the law office uses normal costing?

A) $225,000

B) $350,000

C) $291,667

D) $270,000

E) $420,000

What is the overhead applied to a 500 hour job if the law office uses actual costing?

A) $5,200

B) $4,500

C) $3,750

D) $5,000

E) $5,835

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