Gant Accounting Performs Two Types of Services, Audit and Tax

question 146

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: $$\begin{array} { l r r } & \text { Audit } & \text { Tax } \\\text { Direct labor cost } & \$ 50,000 & \$ 100,000 \\\text { CPU minutes } & 40,000 & 10,000 \\\text { Legal hours used } & 200 & 800\end{array}$$ Gant Accounting performs tax services for Cathy Lane. Direct labor cost is $1,200; 600 CPU minutes were used; and 1 legal hour was used. What is the total cost of the Lane job using activity-based costing?

• A) $3,600
• B) $3,750
• C) $5,400
• D) $4,950

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Definitions:

Clock Radio

An electronic device that combines the features of a clock with a radio, often used as an alarm.

Substantia Nigra

Black nuclear mass in the midbrain; involved in coordinating movement and maintaining muscle tone.

Basal Nuclei

A group of nuclei in the brain involved in the control of voluntary motor movements, procedural learning, and emotions.

Tegmentum

Floor of the midbrain.