Problem 17-5A 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. Expected Use of Cost Drivers per Service Expected Use of Activity Cost Pools Cost Drivers Estimated Overhead Cost Drivers Audit Tax $237,900 $1,830,000 $1,126,000 $704,000 Employee training Direct labor dollars 2,500 Typing and secretarial Number of reports/forms 76,000 800 1,700 Number of minutes 193,800 Computing 60,000 27,000 33,000 Facility rental Number of employees 143,000 40 22 18 56,000 25,300 Travel Per expense reports 81,300 Direct $732,000 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 Total overhead cost assigned