Data concerning the activities of Legal Eye, LLC, a law firm, have been provided
ID: 2482050 • Letter: D
Question
Data concerning the activities of Legal Eye, LLC, a law firm, have been provided below:
Activities
Estimated OH Cost
Expected
Activity
$27,750
750 research hours
$1,102,050
6,975 meeting hours
$31,920
2,280 documents
Legal Eye uses activity-based costing. The company needs to estimate the cost of a client job that is expected to require $20,500 of professional labor costs, 125 research hours, 8 meeting hours, and 65 documents. How much of the total estimated job cost is related to the 8 hours of meeting time?
$910
$1,264
$4,625
$6,799
Activities
Estimated OH Cost
Expected
Activity
Researching legal issues$27,750
750 research hours
Meeting with clients$1,102,050
6,975 meeting hours
Preparing documents$31,920
2,280 documents
Explanation / Answer
Overhead rate per meeting hour = 1102050 /6975 =$ 158 per meeting hour
Allocated cost = 8 *158 = $ 1264
correct option is ""B"
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