Mumbai Travel Services provided the following information: Direct labor rate: $ 40 per hour Predetermined allocation rate for indirect costs: $ 22 per direct labor hour If Mumbai Travel records revenue of $ 350 for a job requiring 5 hours of direct labor, then Mumbai Travel will make a profit of $ 40.

True/False

Question

Baron Savage

Business

21 April, 18:48

Mumbai Travel Services provided the following information: Direct labor rate: $ 40 per hour Predetermined allocation rate for indirect costs: $ 22 per direct labor hour If Mumbai Travel records revenue of $ 350 for a job requiring 5 hours of direct labor, then Mumbai Travel will make a profit of $ 40.

True/False

+4

Answers (1)

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Demarcus Mathis · Answer 1

True

Explanation:

Labour rate (indirect cost) = $40 per hour

Labour rate (Direct cost) = $22 per hour

The total cost per hour is $40 + $22 = 62

For five hours the total labour cost will be = 62 * 5 = £310

According to the results, Mumbai travel will make a profit of $ 40.