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More info Information relating to Driver Inc. follows: : (Click the icon to view the company's Information.) 1. Compute Driver's indirect cost allocation rate 2. Compute the total costs assigned to the Wemer and Innella engagements. 3. Compute the operating income from the Werner and Innolla engagements. Requirement 1. Compute Driver's indirect cost allocation rate. First identify the formula used to compute the indirect cost allocation rate, then compute the rate. (Round your answer to two decimal places.) Indirect cost allocation rate (per hr) () Driver Inc. is a technology consulting firm focused on website development and integration of internet business applications. President Priscilla Post's ear is ringing after an unpleasant call from client Jarod Werner. Werner was irate after opening his bill for Driver's redesign of his company's website. Werner said that Driver's major competitor, Sigma Applications, charged much lower fees to another company for which Werner serves on the board of directors. Post is puzzled for two reasons. First, she is confident that her firm knows website design and support as well as any of Driver's competitors. Post cannot understand how Sigma Applications can undercut Driver's rates and still make a profit. But Sigma Applications is reputed to be very profitable. Second, just yesterday Post received a call from client Ken Innella. Innella was happy with the excellent service and reasonable fees Post charged him for adding a database-driven job-posting feature to his company's website. Post was surprised by Innella's compliments because this was an unusual job for Driver that required development of complex database management and control applications, and she had felt a little uneasy accepting it. Like most consulting firms, Driver traces direct labour to individual engagements (jobs), Driver allocated indirect costs to engagements using a budgeted rate based on direct labour hours. Post is happy with this system, which she has used since she established Driver in 1996. Post expects to incur $710.000 of indirect costs this year, and she expects her firm to work 5,900 direct labour hours. Post and the other systems consultants eam S360 per hour. Clients are billed at 175% of direct labour cost. Last month, Driver's consultants spent 105 hours on Werner's engagement. They also spent 105 hours on Innella's engagement. Print Done Help me solve this Video Get more help Clear all Check

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