Gant Accounting Performs Two Types of Services, Audit and Tax

question 103

Multiple Choice

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.

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