Score: 0 of 1 pt 1 of 5 (1 complete HW Score: 0%, 0 of 5 pts E19-24 (similar to)

Question

Score: 0 of 1 pt 1 of 5 (1 complete HW Score: 0%, 0 of 5 pts E19-24 (similar to) EQuestion Help Northeast, Inc. is a technology consulting firm focused on Web site development and integration of Internet business applications. The president of the company expects to incur $837,000 of indirect costs this year, and she expects her firm to work 6,200 direct labor hours. Northeast's systems consultants provide direct labor at a rate of $280 per hour. Clients are billed at 160% of direct labor cost. Last month, Northeast's consultants spent 140 hours on Lovato's engagement Requirements 1. Compute Northeast's predetermined overhead alocation rate per direct labor hour. 2. Compute the total cost assigned to the Lovato engagement. 3. Compute the operating income from the Lovato engagement. Requirement 1. Compute Northeast's predetermined overhead allocation rate per direct labor hour. Select the formula, then enter the amounts to calculate the predetermined overhead (OH) allocation rate Predetermined OH Estimated qty of the allocation base Estimated overhead costs - allocation rate - $135 837,000 6,200 Requirement 2. Compute the total cost assigned to the Lovato engagement. Begin by selecting the formula to calculate the overhead costs assigned to the engagement. Allocated Actual qty of the allocation base used Predetermined OH allocation rate x Now compute the total cost assigned to the Lovato engagement. Total direct labor cost Allocated overhead costs Total cost of engagement - overhead costs 6360

Explanation / Answer

Hours on Lovato engagement= 140 hours

Total direct labour cost= $280 per hour*140 hours=$39200

Allocated Overhead costs=$135per hour*140 hours=$18900

Total cost of engagement=$58100

Requirement 3

Sales= 160% of direct labour cost= 160%*$39200=$62720

Less: cost=$58100

Operating income= sales- cost= $ 4620

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