Refer to the data in S17-12. Assume that Roth’s accountants are expected to work a total of 8,000 direct labor hours in 2012. Roth’s estimated total indirect costs are $240,000.
Requirements
1. What is Roth’s indirect cost allocation rate?
2. What indirect costs will be allocated to client 507 if Sawyer works 12 hours to prepare the financial statements?
3. Calculate the total cost to prepare client 507’s financial statements.