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Problem 18-5A Lewis and Stark is a public accounting firm that offers two primary services, auditing and tax-return preparation. service lines as to who is

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Problem 18-5A Lewis and Stark is a public accounting firm that offers two primary services, auditing and tax-return preparation. service lines as to who is contributing the greater amount to the bottom l on the basis of 40% o direct labor dollars, while the audit partners argue for mple enting activity based costing. The partners agree to use purposes of analysis and comparison. The following overhead data are collected to develop the comparison. A controversy has developed between the partners of the two ine. The area of contention is the assignment of overhead. The tax partners argue for assigning overhead for Expected Use of Cost Drivers per Service Expected Use Estimated of Cost Drivers Activity Cost PoolsC Employee trainingDirect labor dollars Typing and secretarial Number of reports/forms Cost Audit $214,500 76,900 200,300 142,000 81,300 $715,000 $1,787,500 $1,159,000 $628,500 800 1,700 27,000 33,000 18 56,000 25,300 2,500 Facility rental Travel Number of minutes Number of employees Per expense reports 40 Direct 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 g VIDEO SIMELAR

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