Lewis and Stark is a public accounting rm that offers two primary services, auditing and taxreturn 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 fol lowing overhead data are collected to develop the comparison. Estimated Use of Cost Drivers perService Estimated Use of Activity Cost Pools Cost Drivers Estimated Overhead Cost Drivers Audit Tax Employee training Direct labor dollars $201,025 $1,327,500 $1,133,000 $694,500 Typing and secretarial Number of reportsfforms 76,000 2,500 800 1,700 Computing Number of minutes 223,300 60,000 27,000 33,000 Facility rental Number of employees 149,000 40 22 18 Travel Per expense reports 81,1?5 Direct 56,000 25,300 $73 1,000 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 $ eTextbook and Media 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.) Activity Estimated Expected Use of Activity-Based Cost Pools Overhead Cost Drivers per Activity Overhead Rates Employee $ $ Direct labor $ per DL training dollars dollar Typing and Reports/forms $ per secretarial report/form Computing Minutes per minute Facility Employees $ per rental employee Travel Direct Direct $Prepare a schedule assigning each activity's overhead cost pool to each service based on the use of the cost drivers. {Round overhead rates to 2 dednmlplaces, 2.3. 12.25 and cost assigned to 0 decimal places. as 2500.) Estimated Use of Activity-Based Estimated L Activity Cost Pool Cost Drivers Overhead Rates Cost Assigned Cost Driv Employee training $ $ $ Typing and secretarial $ Computing $ Facility rental $ Travel Direct Overhead costs $ assigned Estimated Use of Activity-Based Cost Drivers Overhead Rates Cost Assigned Direct