Port Accounting Performs Two Types of Services, Audit and Tax

question 8

Multiple Choice

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.

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Definitions:

Fundamental Attribution Error

In explaining other people’s behavior, the tendency to overemphasize personality traits and underestimate situations.

Actor/Observer Bias

is the tendency to attribute one's own actions to external causes while attributing other people's behaviors to internal causes.

Self-Fulfilling Prophecy

People’s tendency to behave in ways that confirm their own expectations or other people’s expectations.

Ingroup/Outgroup Bias

The tendency to favor and extend loyalty to members of one's own group (the ingroup) while discriminating against members of other groups (the outgroup).