Taylor and King, CPAs Installed a New Computer System

question 65

Multiple Choice

Taylor and King, CPAs installed a new computer system. When the needs of the various divisions were analyzed, it was determined that the Audit Division would require 25% of the capacity, the Tax Division would require 45% of the capacity, and the Business Consulting Division would require 30% of the capacity. The computer system will cost $270,000.
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How much of the computer system's cost will be allocated to the Tax Division?

• A)$90,000.
• B)$67,500.
• C)$121,500.
• D)$81,000.

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Definitions:

Raw Materials

Basic substances in their natural, modified, or semi-processed state, used as inputs for manufacturing.

Standard Cost System

A cost accounting system that uses standard costs for inventory valuation and cost control, comparing actual costs to standard costs to assess performance.

Direct Labor Costs

The wages paid to workers directly involved in the manufacturing of products or the provision of services.

Cash Account

A financial account that records the amounts of cash available for transactions or held as reserves.