Question

Gant Accounting performs two types of services, Audit and Tax. Gant’s overhead costs consist of computer support, $267000; and legal support, $133500. Information on the two services is:
(See screenshot)

Answer 1

Answer:

$240,300

Step-by-step explanation:

Given :

Overhead cost :

Computer support = $267000

legal support = $133500

Overheads applied to audit services = (Number of CPU minutes used by Audit services * activity rate per CPU minute)

+

(number of legal hours used by Audit services * activity rate per legal hour)

The overhead applied to audit is thus :

40,000 * (267,000 / (40,000 + 10,000)) +

200 * (133500 / (200 + 800)

(40000 * 5.34) + (200 * 133.5)

= $240,300