GMPK treats its administrative support group as an indirect cost for its three major services: auditing, tax, and consulting. The estimated costs of the administrative support group are €300,000 for the year. The firm is considering the following cost drivers with the corresponding usage by each service.

a. Which cost driver appears to most accurately reflect the costs of the administrative support group?

b. How are the costs of the administrative support group traced using each cost driver?

c. Why might GMPK decide to use a cost driver different than the cost driver that most accurately reflects the costs of the secretarial pool?

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Cost Driver Number of telephone calls Revenue in euros Hours working on projects Auditing Tax Consulting 800 100 100 4,000,000 4,000,000 4,000,000 4,000 4,000 2,000