Dillani,Inc

Multiple Choice

Dillani,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 $200,000.The company is expected to work 8,000 direct labor hours during the year.The direct labor rate is $300 per hour.Clients are billed at 120% of direct labor cost.Last month,Dillani's consultants spent 170 hours on Davenport,Inc.Calculate the operating income from Davenport.

A) $51,195
B) $51,000
C) $164,333
D) $5,950