Bass Accounting Services expects its accountants to work a total of 27,000 direct labor hours per year. The company's estimated total indirect costs are $270,000. The company uses direct labor hours as the allocation base for indirect costs. What is the indirect cost allocation rate?
A) $10.00 per hour
B) $20.00 per hour
C) $100.00 per hour
D) $12.00 per hour
A) $10.00 per hour
Explanation: Predetermined overhead allocation rate = Expected indirect costs / Expected direct labor hours
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