Ernst & Gray, CPAs Has Three Divisions: Audit, Tax, and Business

question 107

Multiple Choice

Ernst & Gray, CPAs has three divisions: audit, tax, and business consulting.When the specifications for the new computer system were established, the audit division needed 50% of the capacity, the tax division required 30%, and business consulting required 20%.The fixed computer department costs are allocated based on computer needs.The variable costs of the computer department are allocated based on the minutes of computer time that each department uses.The computer division budget for fixed costs is $450,000, and the budget for variable costs is $145,600.The company anticipates using 520,000 minutes of computer time.What amount of variable costs will be allocated when a division uses a minute of computer time?

• A)$4.50
• B)$2.80
• C)$1.15
• D)$0.28

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Definitions:

Mental Illness

A wide range of mental health conditions that affect mood, thinking, and behavior.

Incidence

The rate at which new cases of a disease or condition occur over a specific period of time among a specified population.

New Cases

Recently identified instances of a condition or situation, often used in the context of diseases or legal matters.

Biological Model

A perspective in psychological and medical research that emphasizes the physiological and genetic bases of behavior and mental processes.