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Question(s) / Instruction(s):

Alta Services Company has 30 full-time employees. Actual time for each employee for the last period was as follows:

Billable time for clients                  2,000 hours

Vacation time                                    200 hours

Professional development          175 hours

Un billable time                                                0 hours

Sick leave                                            125 hours

Demand for the company’s services is at 100% of the time available. Each employee is paid a salary of $75,000 per year.

Management believes that clients should be charged for the employee’s benefits. What should be the total actual indirect-cost rate per billable hour?

a.            $4.17

b.            $5.83

c.             $7.50

d.            $9.17

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