(51) Using activity-based costing, prepare a schedule showing the computations of the activity-based overhead rates (per cost driver). (Round overhead rates to 2 decimal places, e.g. 12.25.) Estimated Overhead Activity-Bas Overhead Ra Activity Cost Pools Employee training Typing and secretarial Expected Use of Cost Drivers per Activity Direct labor dollars $ $ $ Reports/forms Computing Minutes $ Facility rental Employees $ Travel Direct Direct $ e Textbook and Media Save for Later Attempts: 0 of 5 used Submit Answer (b1) Using activity-based costing, prepare a schedule showing the computations of the activity-based overhead rates (per cost driver). (Round overhead rates to 2 decimal places, e.g. 12.25.) Estimated Overhead Activity-Based Overhead Rates Expected Use of Cost Drivers per Activity Direct labor dollars $ per DL dollar Reports/forms per report/form Minutes per minute Employees per employee Direct Direct $ Lewis and Stark is a public accounting firm that offers two primary services, auditing and tax-return preparation. A controversy has developed between the partners of the two service lines as to who is contributing the greater amount to the bottom line. The area of contention is the assignment of overhead. The tax partners argue for assigning overhead on the basis of 40% of direct labor dollars, while the audit partners argue for implementing activity-based costing. The partners agree to use next year's budgeted data for purposes of analysis and comparison. The following overhead data are collected to develop the comparison. Estimated Use of Cost Drivers per Service Audit Tax $1,125,000 Activity Cost Pools Employee training Typing and secretarial Computing Facility rental Travel 800 Cost Drivers Direct labor dollars Number of reports/forms Number of minutes Number of employees Per expense reports Estimated Use of Cost Drivers $1,785,000 2,500 60,000 40 Estimated Overhead $214,200 76,000 195,600 147,000 81,200 $714,000 $660,000 1,700 33,000 18 27,000 22 Direct 56,000 25,300 (a) Your answer is correct. Using traditional product costing as proposed by the tax partners, compute the total overhead cost assigned to both services (audit and tax) of Lewis and Stark. Audit Tax Total overhead cost assigned to 450000 $ 264000 e Textbook and Media Attempts: 1 of 5 used