Port Accounting Performs Two Types of Services, Audit and Tax

question 117

Multiple Choice

Port Accounting performs two types of services, Audit and Tax.Port's overhead costs consist of computer support, $240,000; and legal support, $120,000.Information on the two services is: $\begin{array}{lrr}&\text { Audit } &\text{Tax}\\\text { Direct labor cost } & \$ 50,000 & \$ 100,000 \\\text { CPU minutes } & 40,000 & 10,000 \\\text { Leqal hours used } & 200 & 800\end{array}$
-Overhead applied to audit services using traditional costing is

• A)$120,000.
• B)$144,000.
• C)$216,000.
• D)$240,000.

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Definitions:

Shareholder Rights

The entitlements granted to shareholders of a corporation, including the right to vote on corporate matters, receive dividends, and share in the assets upon dissolution.

Proposed Merger

A plan or offer to combine two or more companies into one entity, subject to approval by regulators and shareholders.

Common Shareholder

An individual or entity that owns shares in a company, granting them ownership equity and usually voting rights.

Special Cases

Situations or scenarios that deviate from the norm, requiring unique considerations or treatments in various contexts such as law, economics, or computing.