Problem

Computing activity-based costing rates The partners of O’Reilly and Shriberg, attorneys...

Computing activity-based costing rates

The partners of O’Reilly and Shriberg, attorneys-at-law, decide to implement an activity-based costing system for their firm. They identify the following three cost pools and budgeted amounts for each for the coming year: fringe benefits, $450,000; paralegal support, $250,000; and research support, $650,000. It is determined that the best cost driver for fringe benefits is professional labor dollars ($1,500,000); paralegal support is partner labor hours (4,000); and research support is professional labor hours (20,000).

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

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Solutions For Problems in Chapter 9