Rubio,Inc ,A Law Consulting Firm,has Been Using a Single Predetermined

Multiple Choice

Rubio,Inc. ,a law consulting firm,has been using a single predetermined overhead allocation rate with direct labor hours as the allocation base to allocate overhead costs.The direct labor rate is $300 per hour.Clients are billed at 160% of direct labor cost.Chandler Massey,the president of Rubio,decided to develop an ABC system to more accurately allocate the indirect costs.He identified two activities related to the total indirect costs-travel and information technology (IT) support.The other relevant details are given below: $\begin{array}{|l|l|r|r|}\hline\text { Activity } & \text { Allocation base } & \text { Estimated costs } & \begin{array}{c}\text { Estimated quantity } \\\text { of allocation base }\end{array} \\\hline \text { Travel } & \text { Miles driven } & \$ 85,000 & 1,500 \text { miles } \\\hline \text { IT Support } & \text { Direct labor hour's } & \underline{59,000} & 1,250 \text { DLH } \\\hline \text { Total } & & \$ 144,000 & \\\hline\end{array}$ The predetermined overhead allocation rate for travel will be ________.(Round your answer to the nearest cent. )

A) $47.20 per mile
B) $56.67 per mile
C) $68.00 per mile
D) $96.00 per mile