Question: The partners of Trebbi and Schertzer a security services firm

The partners of Trebbi and Schertzer, 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, $140,000; technology support,
$80,000; and research support, $300,000. It is determined that the best cost driver for fringe benefits is professional labor dollars; technology support is partner labor hours; and research support is professional labor hours. The two partners have budgeted salaries and billable hours of $150,000 and 1,500 billable hours each for the coming year. There are also eight investigators earning $50,000 and having 1,500 billable hours each.
Compute the budgeted overhead rate for each of the three cost pools.

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  • CreatedMarch 31, 2015
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