(Solved) Engelhardt, Inc., a law consulting firm, has been using a single predetermined overhead allocation ...

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:

Activity   Allocation base   Estimated costs   Estimated quantity
of allocation base
Travel   Miles driven   $77,000   3,500 miles
IT Support   Direct labor hours   55,000   1,250 DLHr
Total      $132,000.00

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

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Engelhardt, Inc., a law consulting firm, has been using a single predetermined overhead allocation ...

Horngren's Financial & Managerial Accounting, The Financial Chapters

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