estion 20 (0.5 points) Accounting performs two types of services, tax and consul
ID: 2330178 • Letter: E
Question
estion 20 (0.5 points) Accounting performs two types of services, tax and consulting. JC's estimated overhead costs for next year are Computer support cost pool:$200,000 Legal support cost pool: $100,000 Estimated use of cost drivers for next year are CPU minutes (cost driver for computer support) Total: 50,000 minutes Tax services: 40,000 minutes Consulting services: 10,000 minutes Legal hours used (cost driver for legal support) Total: 1,000 hours Tax services: 200 hours Consulting services: 800 hours Overhead applied to tax services (for computer support and legal support) using activity-based costing is $100,000. $120,000. $180,000. $200,000 SaveExplanation / Answer
Computer support cost pool = $200,000
Total CPU minutes = 50,000
Hence, computer support cost per CPU minute= 200,000/50,000
= $4
Legal support cost pool = $100,000
Total legal hours = 1,000
Hence, Legal support cost per legal hour = 100,000/1,000
= $100
Hence, overhead applied to tax services ( for computer support and legal support) using activity based costing is $160,000 + $20,000 = $180,000
Hence, correct option is (c) $180,000
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Tax services Consulting services CPU minutes 40,000 10,000 Computer support cost 40,000 x 4 = $160,000 10,000 x 4 = $40,000Related Questions
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