Question - NBS, Inc. is a technology consulting firm focused on Website development and integration of Internet business applications. The president of the company expects to incur $719,600 of indirect costs this year, and she expects her firm to work 8,000 direct labor hours. NBS' systems consultants earn $350 per hour. Clients are billed at 150% of direct labor cost. Last month NBS' consultants spend 100 hours on Windstream's project.
a. Compute NBS' indirect cost allocation rate per direct labor hour.
b. Compute the total cost assignment to the Windstream project.
c. Compute operating income from the Windstream project.