Answer:
High indirect-cost rate is $31.25
Low indirect-cost rate is $115
Explanation:
It is noteworthy that the indirect cost-rate refers to the sum of variable cost per hour+fixed cost per hour
High indirect-cost rate=variable cost per hour+fixed cost per hour
High output:
variable cost per hour=total variable costs/number of hours
fixed cost per hour=Fixed costs/number of hours
variable cost per hour=($300,000/24,000)=$12.5
fixed cost per hour =($450,000/24000)=$18.75
high indirect cost-rate=$12.5+$18.75=$31.25
Low output:
variable cost per hour=total variable costs/number of hours
fixed cost per hour=Fixed costs/number of hours
variable cost per hour=($125,000/5,000)=$25.00
fixed cost per hour =($450,000/5,000)=$90
low indirect cost-rate=$25+$90=$115
