step by step
Lewis and Stark is a public accounting firm that offers two primary services, auditing and the return preparationA controwersys 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 are for assigning overhead on the basis of 40% of direct labor dollars while the audit partners argue for implementing activity-based costine. The partners agree to the next year's budpeted data for purposes of analysis and comparison. The following overhead data are collected to develop the comparison Estimated Use of Cost Drivers per Service Activity Cost Pools Cost Drivers Estimated Overhead Estimated Use of Cost Drivers Audit Employee training $214.800 $1,790,000 51134,000 $656000 Typing and secretarial 76,800 2.500 800 1,700 Computing Direct labor dollars Number of reportsform Number of minutes Number of employees Per per reports 199 200 80,000 27.000 33,000 Facility rental 144,000 40 22 18 Travel BL200 Direct 56.000 25,300 $216.000 (a Your wars oor Using tradition oroduct costing protowolowcosts Nos both wrices audit and tons and Stars 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 cont assigned $ 453.400 S 262.400 eTextbook and Media Attempts: 1 of 3 used (61) Your answer is correct Using the bed contine prepare a heade showing the computations of the activity based overhead rates (per cost driver) Round overhead rotes to 2 decimal places 1225) Activity Pout Pools Estimated Overhead Activity.os Overhead Ra Expected Use of Cost Drivers per Activity Direct labor 190000 dolar mployee $ 214000 5 Voing and real 7100 2100 Reports Norms $ 3072 omputing 199,00 COD M Using activity-based costing prepare a schedule showing the computations of the activity based overhead rates (per cost driver) Round overheads to 2 decimal places. 1225 Activity Sost Pools Estimated Overhead Expected Use of Cost Drivers per Activity Activity-Bas Overhead Ra mployee raining $ 214,100 5 200 Direct labor dollars $ 022 yping and ecretarial 7. 30 Reports/form $ 30.72 Somputing 199 200 MOD Minutes 5 132 clity ent 4400C Employees 5 3600 Yav 1250 Direct co Tethook and Me Attempts of used 2 www und (62) Prepare a schedule assigning each activity's overhead cost pool to each service based on the use of the cost drivers. (Round overhead notes to 2 decimal places, eg. 12.25 and cost assigned to decimal places, es 2,500) Audit Estimated Use of Cost Drivers Activity Cost Pool Activity-Based Overhead Rates Cost Assigned Employee training $ $ Typing and secretarial $ $ Computing Facility rental S Travel Direct Overhead costs assigned S e Textbook and Media Attempts: 0 of 3 used Submit
