Question

Mumbai Travel Services provided the following​ information: Direct labor​ rate: $ 40 per hour Predetermined allocation rate for indirect​ costs: $ 22 per direct labor hour If Mumbai Travel records revenue of $ 350 for a job requiring 5 hours of direct​ labor, then Mumbai Travel will make a profit of $ 40.
True/False

Answer 1

Answer:

True

Explanation:

Labour rate (indirect cost) = $40 per hour

Labour rate (Direct cost) = $22 per hour

The total cost per hour is $40 + $22 = 62

For five hours the total labour cost will be = 62 * 5 = £310

According to the results, Mumbai travel will make a profit of $ 40.