Clearstream Data Consulting (CDC) is a firm which advises its clients on data analytics. It uses the job costing system where each consulting project is deemed to be a separate job.

The total costs incurred by CDC over the most recent period which has just passed is as follows 

[Cost object = each consulting project undertaken]:

Direct cost $700,000

Indirect cost $250,000

CDC allocates all its indirect costs to each project based on the direct cost (dollars) incurred by each project.

One of the consulting project that CDC undertook recently is Project 88 which incurred a direct cost of $100,000. Project 88 is one of the 10 projects undertaken by CDC over the same period.

Required

Calculate the amount of indirect cost allocated to Project 88 in the most recent period 

Answer rating: 100% (QA)

To allocate the indirect costs to Project 88 we need to use the al... View the full answer