Dunby IncIs a Consulting Firm That Offers Optimal Legal Solutions

Multiple Choice

Dunby Inc.is a consulting firm that offers optimal legal solutions.It allocates indirect costs using a single plantwide rate with direct labor hours as the allocation base.The estimated indirect costs for this year amount to $150,000.The company is expected to work for 5,000 direct labor hours during the year.The direct labor rate is $250 per hour.Clients are billed at 140% of direct labor cost.Last month,Dunby's consultants spent 175 hours on Xyme Inc.Calculate the operating income from Xyme.

A) $49,000
B) $43,750
C) $38,500
D) $12,250