Use the Following Information to Answer the Following Questions

question 60

Multiple Choice

Use the following information to answer the following Questions
Bridges and Lloyd, an accounting firm, provides consulting and tax planning services. For many years, the firm's total administrative cost (currently $250,000) has been allocated to services on the basis of billable hours to clients. A recent analysis found that 65% of the firm's billable hours to clients resulted from tax planning services, while 35% resulted from consulting services.
The firm, contemplating a change to activity-based costing, has identified three components of administrative cost, as follows:

A recent analysis of staff support found a strong correlation between the number of staff personnel and the number of clients served (consulting, 20; tax planning, 60) . In contrast, in-house computing and miscellaneous office cost varied directly with the number of computer hours logged and number of client transactions, respectively. Consulting consumed 30% of the firm's computer hours and had 20% of the total client transactions.
-Assuming the use of activity-based costing, the proper percentage to use in allocating staff support costs to tax planning services is:

• A) 20%.
• B) 60%.
• C) 65%.
• D) 75%.
• E) 80%.

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Definitions:

Intimacy

The feeling of being close and emotionally connected and supported; it involves trust, vulnerability, and an exchange of personal thoughts and feelings.

Generativity

A concept in psychology that refers to the concern for establishing and guiding the next generation, often manifested through parenting, teaching, mentorship, and other creative activities.

Kübler-Ross

Refers to a model of the five stages of grief (denial, anger, bargaining, depression, acceptance) developed by Elisabeth Kübler-Ross.

Acceptance

Acceptance is the act of receiving or consenting to something offered or recognizing the reality of a situation without attempting to change it or protest.