Gant Accounting Performs Two Types of Services, Audit and Tax

question 101

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 activity-based costing is

• A) $150,000.
• B) $180,000.
• C) $270,000.
• D) $300,000.

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Definitions:

Strategy Implementation

The action phase of strategic management, involving the execution of planned strategies to achieve organizational objectives.

Information Technology

The use of computers, storage, networking, and other physical devices, infrastructure, and processes to create, process, store, secure, and exchange all forms of electronic data.

Institutional Memory

The collective knowledge and history held within an organization, enabling it to learn from past experiences and decisions.

Hidden Cost

Expenses not immediately apparent or obvious when purchasing or investing in something, often becoming clear later on.