Question: The partners of Franklin and Silva a security services firm

The partners of Franklin and Silva, a security services firm, decide to implement an activity based costing system. They identify the following three cost pools and budgeted amounts for each for the coming year: fringe benefits, $400,000; technology support, $20,000; and litigation support, $300,000. It is determined that the best cost driver for fringe benefits is professional labor dollars ($2,000,000); technology support is partner labor hours (2,000); and research support is professional labor hours (25,000).

Compute the budgeted overhead rate for each of the three cost pools.

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  • CreatedMay 05, 2014
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