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D. Plant-wide Rate versus ABC The accounting firm of Menzies and Associates provides two products to its clients-tax services and audit services. Last year, total
D. Plant-wide Rate versus ABC The accounting firm of Menzies and Associates provides two products to its clients-tax services and audit services. Last year, total overhead costs of $1,000,000 were allocated based on direct labor hours. A total of 10,000 direct labor hours were required last year for tax clients at a cost of $350,000, and 30,000 direct labor hours were required for audit clients at a cost of $1,200,000. Direct materials used were negligible and are included in overhead costs. Sales revenue totaled $720,000 for tax services and $2,200,000 for audit services. 1-Use the form below to calculate the total costs and profits per produet using the office-wide allocation rate approach
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