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:

Devaluation

Government policy that lowers the nation’s exchange rate so that its currency is worth less than it had been relative to foreign currencies.

Currency

Coins and paper money that serve as a medium of exchange.

Exports

Goods and services produced in a nation and sold to customers in other nations.

Imports

Goods and services bought by people in one country that are produced in other countries.