US 1 Los Out PRINCIPLES OF G I/II (ACCT 200/201) ignment me: 05:16 PM/ Gant Acco

Question

US 1 Los Out PRINCIPLES OF G I/II (ACCT 200/201) ignment me: 05:16 PM/ Gant Accounting the two services is: performs two types of services, Audit and Tax. Gant's overhead costs consist of computer support, $270000; and legal support, $132000. Information on $50000 $100000 40000 10000 200 800 Direct labor cost CPU minutes Gant Accounting performs tax services for Cathy Lane. Direct labor cost is $1200; 600 CPU minutes were used; and 1 legal hour was used, what is the total cost of the Lane job using activity-based costing? o $3.372 O $5040 O $4572 O $3240 Click if you would like to Version 4.24

Explanation / Answer

STEP :1 CACLULATION OF THE COST DRIVER RATE CPU COST PER CPU UNIT = Cost of Computer Support / Total CPU Minutes CPU COST PER CPU UNIT = $ 270,000 / 40,000 + 10,000 CPU COST PER CPU UNIT = $ 270,000 / 50,000 CPU COST PER CPU UNIT = $ 5.40 Per Minutes Cost per Legal Hours Used = Cost of leagal Services / Legal Hours Used Cost per Legal Hours Used = $132,000 / 200+800 Cost per Legal Hours Used = $132,000 / 1000 Hours Cost per Legal Hours Used = $132 Per Hours STEP 2: CALCULATION OF TOTAL COST FOR CATHY LANE Direct Labour Cost = $                  1,200 Computer Support = (600 CPU X $ 5.40) $                  3,240 Legal Support (1 Hours X $ 132) $                      132 Total Cost $                  4,572 Answer = Option 3 = $ 4,572

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