At the Bayshore Advertising Agency, Partner and Staff Compensation Cost

Multiple Choice

At the Bayshore Advertising Agency, partner and staff compensation cost is a key driver of agency overhead. In light of this fact, which of the following is the correct expression to determine the amount of overhead applied to a particular client job?

A) (Budgeted overhead /budgeted compensation) *budgeted compensation cost on the job.
B) (Budgeted overhead / budgeted compensation) * actual compensation cost on the job.
C) (Budgeted compensation /budgeted overhead) * budgeted compensation cost on the job.
D) (Budgeted compensation/budgeted overhead) * actual compensation cost on the job.
E) None of these, because service providers do not apply overhead to jobs.