Port Accounting Performs Two Types of Services, Audit and Tax

question 85

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 tax services using activity-based costing is

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

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Definitions:

Demand

The total quantity of a good or service that consumers are willing and able to purchase at various prices.

Chipotle

An international chain of fast-casual restaurants specializing in tacos and Mission-style burritos.

Inferior Good

Goods whose demand declines as consumer income rises, distinct from normal goods where demand increases with higher income.

Buyers' Incomes

The total earnings of consumers which influence their purchasing power and demand in the marketplace.