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What is the overhead rate based on a single cost driver

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Question - Use the following labor budget data for Roy & Miller Accounting, LLP.

Partner Salaries $800,000

Partner Benefits (30%) 240,000

Total Partner Compensation $1,040,000

Staff Accountant Salaries $1,000,000

Staff Benefits (30%) 300,000

Total Staff Compensation $1,300,000

The budgeted overhead cost for the year is $2,246,400. The company has estimated that one-third of the budgeted overhead cost is incurred to support the firm's two partners, and two-thirds goes to support the staff accountants. The current audit bid for Monoco Industries requires $17,000 in direct partner professional labor, $30,000 in direct staff accountant professional labor, $5,400 in direct material.

Required - What is the overhead rate based on a single cost driver (rounded to the nearest percentage)?

a. 96%

b. 95%

c. 225%

d. 64%

e. 77%

Reference no: EM132557048

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