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Locke Data Processing reported expenses of $8.20 million for indirect labor, of which $4.30 million was...

Locke Data Processing reported expenses of $8.20 million for indirect labor, of which $4.30 million was for data analysis and $3.90 million was for data entry. Locke recorded 50,000 hours of data analysis and 150,000 hours of data entry. What are the activity-based rates for each area of direct labor?

Direct Labor ABR

Data analysis ---- per hour

dater entrey --- per hour

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Answer #1

Activity based rate = Overhead/direct labor hours

Data analysis = 4,300,000/50,000

= 86 per hour

Data entry = 3,900,000/150,000

= 26 per hour

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