Question - Dye and Dye, Attorneys-at-Law, each bill 1,500 hours per year and receive pay of $100,000 each. Four paralegals work for the firm and each receives pay of $40,000 and works 2,000 hours per year. Overhead of $396,000 is anticipated, of which $300,000 is attorney support, and the rest is paralegal support. Determine overhead under each of the following circumstances:
a. A simplified cost approach is used based on hours.
b. A simplified cost approach is used based on payroll dollars.
c. An activity-based costing approach is used. Attorney support is based on labor costs, and paralegal support is based on hours worked.