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:

Exemplification

The act of illustrating or showing by example; often used in teaching and explanation strategies.

Identification

Bolstering self-esteem by forming an imaginary or real alliance with some person or group.

Intimidation

The act of making someone feel frightened or overawed, especially in order to make them do what one wants.

Impression Management

Usually conscious efforts by people to influence how others think of them.