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The following information has been gathered ending December 31: for Cheatham Law Offices for its fiscal year Actual office overhead costs $1,275,500 Actual billable labor hours 44,600 Actual billable labor costs $3,960,000 Estimated office overhead costs $1,080,000 Estimated billable labor hours 48,000 Estimated billable labor costs $4,320,000 What is the predetermined office overhead rate per billable labor hour? A
The following information has been gathered ending December 31: for Cheatham Law Offices for its fiscal year Actual office overhead costs $1,275,500 Actual billable labor hours 44,600 Actual billable labor costs $3,960,000 Estimated office overhead costs $1,080,000 Estimated billable labor hours 48,000 Estimated billable labor costs $4,320,000
What is the predetermined office overhead rate per billable labor hour? A. $28.60 B. $26.57 C. $22.50 D. $24.22
Expert Solution
Answer
C .
Explanation
Computation of Predetermined Office Overhead Rate:
Predetermined Office Overhead Rate = Estimated Office Overhead Cost / Estimated Billable Labor Hours
= 1080000 / 48000
= $22.50
Hence the predetermined office overhead rate per billable labor hour = $22.50
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