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Mendburg, Inc. is a consulting firm that offers optimal legal solutions. It allocates indirect costs using a single predetermined overhead allocation rate with direct labor hours as the allocation base. The estimated indirect costs for this year amount to $100,000. The company is expected to work 5,000 direct labor hours during the year. The direct labor rate is $200 per hour. Clients are billed at 120% of direct labor cost. Last month, Mendburg's consultants spent 180 hours on Curelli, Inc. Calculate the operating income from Curelli. O A. $36,000 OB. $3,600 OC. $36,200 OD. $126,000

Mendburg, Inc. is a consulting firm that offers optimal legal solutions. It allocates indirect costs using a single predetermined overhead allocation rate with direct labor hours as the allocation base. The estimated indirect costs for this year amount to $100,000. The company is expected to work 5,000 direct labor hours during the year. The direct labor rate is $200 per hour. Clients are billed at 120% of direct labor cost. Last month, Mendburg's consultants spent 180 hours on Curelli, Inc. Calculate the operating income from Curelli. O A. $36,000 OB. $3,600 OC. $36,200 OD. $126,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Mendburg, Inc. is a consulting firm that offers optimal legal solutions. It allocates indirect costs using a single predetermined overhead allocation rate with direct labor hours as the allocation base. The estimated indirect costs for this year amount to $100,000. The company is expected to work 5,000 direct labor hours during the year. The direct labor rate is $200 per hour. Clients are billed at 120% of direct labor cost. Last month, Mendburg's consultants spent 180 hours on Curelli, Inc. Calculate the operating income from Curelli. OA. $36,000 OB. $3,600 OC. $36,200 O D. $126,000
Transcribed Image Text:Mendburg, Inc. is a consulting firm that offers optimal legal solutions. It allocates indirect costs using a single predetermined overhead allocation rate with direct labor hours as the allocation base. The estimated indirect costs for this year amount to $100,000. The company is expected to work 5,000 direct labor hours during the year. The direct labor rate is $200 per hour. Clients are billed at 120% of direct labor cost. Last month, Mendburg's consultants spent 180 hours on Curelli, Inc. Calculate the operating income from Curelli. OA. $36,000 OB. $3,600 OC. $36,200 O D. $126,000
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