Mendburg,Inc

Multiple Choice

Mendburg,Inc.is a consulting firm that offers optimal legal solutions.It allocates indirect costs using a single predetermined overhead allocation rate with direct labor hours as the allocation base.The estimated indirect costs for this year amount to $100,000.The company is expected to work 5000 direct labor hours during the year.The direct labor rate is $250 per hour.Clients are billed at 130% of direct labor cost.Last month,Mendburg's consultants spent 175 hours on Curelli,Inc.Calculate the operating income from Curelli.

A) $43,945
B) $43,750
C) $113,750
D) $9625