Port Accounting performs two types of services, audit and tax.Port's overhead costs consist of computer support, $240,000; and legal support, $120,000.Information on the two services is: $$\begin{array} { l l l }
&\underline{ \text { Audit } }&\underline { \text { Tax } } \
\text { Direct labour cost } & \$ 50,000& \$ 100,000 \
\text { CPU minutes } & 40,000 & 10,000 \
\text { Legal hours used } & 200 & 800
\end{array}$$ Overhead applied to audit services using ABC is
A)$120,000.
B)$144,000.
C)$216,000.
D)$240,000.

Question

Port Accounting performs two types of services, audit and tax.Port's overhead costs consist of computer support, $240,000; and legal support, $120,000.Information on the two services is: $$\begin{array} { l l l } 
&\underline{ \text { Audit } }&\underline { \text { Tax } } \
\text { Direct labour cost } &   \$ 50,000&  \$ 100,000  \
\text { CPU minutes } & 40,000 & 10,000 \
\text { Legal hours used } & 200 & 800
\end{array}$$ Overhead applied to audit services using ABC is
A)$120,000.
B)$144,000.
C)$216,000.
D)$240,000.

Quizplus · Accepted Answer

The Answer of Port Accounting performs two types of services, audit and tax.Port's overhead costs consist of computer support, $240,000; and legal support, $120,000.Information on the two services is: $$\begin{array} { l l l } 
&\underline{ \text { Audit } }&\underline { \text { Tax } } \
\text { Direct labour cost } &   \$ 50,000&  \$ 100,000  \
\text { CPU minutes } & 40,000 & 10,000 \
\text { Legal hours used } & 200 & 800
\end{array}$$ Overhead applied to audit services using ABC is
A)$120,000.
B)$144,000.
C)$216,000.
D)$240,000.

Port Accounting Performs Two Types of Services, Audit and Tax