Gant Accounting performs two types of services, Audit and Tax. Gant's overhead costs consist of computer support, $300,000; and legal support, $150,000. Information on the two services is: $$\begin{array} { l r r }
& \text { Audit } & \text { Tax } \
\text { Direct labor cost } & \$ 50,000 & \$ 100,000 \
\text { CPU minutes } & 40,000 & 10,000 \
\text { Legal hours used } & 200 & 800
\end{array}$$ Overhead applied to audit services using traditional costing is
A) $150,000.
B) $180,000.
C) $270,000.
D) $300,000.

Question

Gant Accounting performs two types of services, Audit and Tax. Gant's overhead costs consist of computer support, $300,000; and legal support, $150,000. Information on the two services is: $$\begin{array} { l r r } 
& \text { Audit } & \text { Tax } \
\text { Direct labor cost } & \$ 50,000 & \$ 100,000 \
\text { CPU minutes } & 40,000 & 10,000 \
\text { Legal hours used } & 200 & 800
\end{array}$$ Overhead applied to audit services using traditional costing is
A) $150,000.
B) $180,000.
C) $270,000.
D) $300,000.

Quizplus · Accepted Answer

The Answer of Gant Accounting performs two types of services, Audit and Tax. Gant's overhead costs consist of computer support, $300,000; and legal support, $150,000. Information on the two services is: $$\begin{array} { l r r } 
& \text { Audit } & \text { Tax } \
\text { Direct labor cost } & \$ 50,000 & \$ 100,000 \
\text { CPU minutes } & 40,000 & 10,000 \
\text { Legal hours used } & 200 & 800
\end{array}$$ Overhead applied to audit services using traditional costing is
A) $150,000.
B) $180,000.
C) $270,000.
D) $300,000.

Gant Accounting Performs Two Types of Services, Audit and Tax