Show Attempt History Current Attempt in Progress 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 Overhead Estimated Use of Cost Drivers Activity Cost Pools Cost Drivers Audit Tax Employee training Direct labor dollars $ 217,800 $ 1,815,000 $ 1,153,000 $ 662,000 Typing and secretarial Number of reports/forms 76,300 2,500 800 1,700 Computing Number minutes 500 60,000 27,000 33,000 Facility rental Number of employees 140,000 40 22 18 Travel Per expense reports 81,300 Direct 56,000 25.300 $726,000 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 $ 461200 $ 264800 X Your answer is incorrect 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 $ 461200 $ 264800 X Your answer is incorrect. 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 Cost Pools Estimated Overhead Expected Use of Cost Drivers per Activity Activity-Ba: Overhead R: Employee training $ $ Direct labor dollars $ Typing and secretarial Reports/forms $ Computing Minutes $ Facility rental Employees $ Travel Direct Direct $ X Your answer is incorrect. 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 $ 461200 $ 264800 X Your answer is incorrect. 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.) Estimated Overhead Expected Use of Cost Drivers per Activity Activity-Based Overhead Rates Direct labor dollars $ per DL dollar Reports/forms per report/form Minutes $ per minute 1007 Employees $ per employee Direct Direct X Your answer is incorrect. Prepare a schedule assigning each activity's overhead cost pool to each service based on the use of the cost drivers (Round Reports/forms report/form Minutes $ per minute Employees $ per employee Direct Direct X Your answer is incorrect. 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 decimal places, e.g. 12.25 and cost assigned to 0 decimal places, e.g. 2,500.) Audit Estimated Use of Cost Drivers Activity Cost Pool Activity-Based Overhead Rates Cost Assigned Employee training Typing and secretarial Computing LORE $ Facility rental $ Travel Direct Overhead costs assigned Save for Later Attempts: unlimited Submit Answer report/form Minutes $ per minute Employees $ per employee Direct Direct X Your answer is incorrect. 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 decimal places, e.g. 12.25 and cost assigned to 0 decimal places, e.g. 2,500.) Tax Estimated Use of Cost Drivers Activity-Based Overhead Rates Cost Assigned Cost Assigned $ $ $ $ $ Direct $ Save for Later Attempts: unlimited Submit
