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 Estimated Use Estimated Activity Cost Pools Cost Drivers Overhead Cost Drivers Audit Tax Employee training Direct labor dollars $ 202,400 $1.840,000 $1,191,000 $649.000 Typing and secretarial Number of reports/forms 76,400 2.500 800 1.700 Computing Number of minutes 232,200 60,000 27.000 33,000 Facility rental Number of employees 144.000 Travel Per expense reports 81,000 56.000 25,300 $736,000 of 22 18 40 Direct (a) Your answer is correct. Using traditional product costing as proposed by the tax partners, compute the total overhead cost assigned to both services Caudit and tax) of Lewis and Stark. Audit Tax Total overhead cost assigned 76.400 $ eTextbook and Media Attempts: 1 of 5 used (61) 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, es 12.25) Activity Estimated Expected Use of Activity Ba Cost Pools Overhead Cost Drivers per Activity Overhead Employee Direct labor training $ dollars Toim la) Your answer is correct. Using traditional product costing as proposed by the taxpartners.compute the total overhead cost assigned to both services Laudit and tax of Lewis and Stark Audit Total Overhead cost assigned $ eTextbook and Media Attempts: 1 of 5 used 1b11 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. - 12.250 Activity Estimated Expected Use of Activity Cost Pools Overhead Cost Drivers per Activity Overhead Employee Direct labor training 5 dollars Typing and secretaria Report forms 5 Computing 5 FY Employees $ Travel Direct Direct eTextbook and Media Atlas of Sused Are (52) (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 476400 259.000 eTextbook and Media Attempts: 1 of 5 used (61) $ per DL 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, c.8. 12.25.) Estimated Expected Use of Activity-Based Overhead Cost Drivers per Activity Overhead Rates Direct labor dollars dollar Reports/forms $ per report/form per minute Employees per employee Direct Minutes $ $ Direct eTextbook and Media Sve for later Attempts of 5 used Submit A 162) The parts of this question must be completed in order. This art will be available when you complete the part about
