Gant Accounting Performs Two Types of Services, Audit and Tax

question 75

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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Definitions:

Total

The sum of all values in a set of numbers.

Null Hypothesis

The default hypothesis that there is no significant difference or effect, serving as a starting point for statistical hypothesis testing.

P-value

The probability of observing test results at least as extreme as the results actually observed, under the assumption that the null hypothesis is correct.

Level of Significance

A measure within hypothesis testing that determines the threshold at which the null hypothesis is rejected, often denoted by alpha (α).