- BUS FPX 4064 Assessment 5 Part 1: Computing Activity-Based Costing Rates.
Computing Activity-Based Costing Rates
Fringe Benefits: $450,000
Paralegal Support: $300,000
Research Support: $750,000
It was determined that the best cost driver for each cost pool is as follows:
For Fringe Benefits: Professional Labor Dollars – $1,800,000
For Paralegal Support: Partner Labor Hours – 4,000 hours
For Research Support: Professional Labor Hours – 20,000 hours
BUS FPX 4064 Assessment 5 Part 1: Computing Activity-Based Costing Rates
Using this information, the budgeted overhead rates for each of the three cost pools are computed as follows:
| Cost Pool | Budgeted Costs | Cost Driver | Budgeted Overhead Rate |
|---|---|---|---|
| Fringe Benefits | $450,000 | $1,800,000 (Professional Labor Dollars) | 0.25 per professional labor dollar |
| Paralegal Support | $300,000 | 4,000 (Partner Labor Hours) | 75 per partner labor hour |
| Research Support | $750,000 | 20,000 (Professional Labor Hours) | 37.5 per professional labor hour |
Explore our BUS FPX 4064 Assessment 6 Joint Products and By-Products assessment for complete information about this class.