Reference no: EM132521792

Question 1: L & L, CPAs, employs two full-time professional CPAs and five support employees. Budgeted direct salary costs include $160,000 for each CPA. The support employees are considered as indirect costs, and this cost was budgeted for $221,000 although the actual cost was $246,000. Actual salaries were $144,000 for each CPA. Direct and indirect costs are applied on a CPA-labor-hour basis. Total budgeted CPA-labor-hours were 4,000. If a client used 600 labor-hours, what are the budgeted direct-cost rate and the budgeted indirect-cost rate, respectively?

Multiple Choice

Option 1: $72; $62.

Option 2: $123; $55.

Option 3: $80; $55.

Option 4: $133; $55.

Option 5: $72; $55.