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10. Accounting firm XYZ provides audit, tax, and general accounting services. It estimates it will have 773 auditing, 500 taxation, and 1,000 other service engagements. The company uses an ABC system with the following three cost pools and cost drivers to allocate its indirect costs: Other Cost pool Costs Cost driver Audit Tax services Length of training sessions x Internal training overhead 150,000 number of conference rooms occupied 640 510 350 IT support 400,000 Number of tickets 1,200 500 300 Researching and interpreting policies and 180,000 Direct labor hours 550 450 200 regulations Total overhead 730,000 How much total overhead cost will be allocated to audit services? 304,000 386,500 146,500 322,500

10. Accounting firm XYZ provides audit, tax, and general accounting services. It estimates it will have 773 auditing, 500 taxation, and 1,000 other service engagements. The company uses an ABC system with the following three cost pools and cost drivers to allocate its indirect costs: Other Cost pool Costs Cost driver Audit Tax services Length of training sessions x Internal training overhead 150,000 number of conference rooms occupied 640 510 350 IT support 400,000 Number of tickets 1,200 500 300 Researching and interpreting policies and 180,000 Direct labor hours 550 450 200 regulations Total overhead 730,000 How much total overhead cost will be allocated to audit services? 304,000 386,500 146,500 322,500

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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10. Accounting firm XYZ provides audit, tax, and general accounting services. It estimates it will have 773 auditing, 500 taxation, and 1,000 other service engagements. The company uses an ABC system with the following three cost pools and cost drivers to allocate its indirect costs: Other Cost pool Costs Cost driver Audit Tax services Length of training sessions x Internal training overhead 150,000 number of conference rooms occupied 640 510 350 IT support 400,000 Number of tickets 1,200 500 300 Researching and interpreting policies and 180,000 Direct labor hours 550 450 200 regulations Total overhead 730,000 How much total overhead cost will be allocated to audit services? 304,000 386,500 146,500 322,500
Transcribed Image Text:10. Accounting firm XYZ provides audit, tax, and general accounting services. It estimates it will have 773 auditing, 500 taxation, and 1,000 other service engagements. The company uses an ABC system with the following three cost pools and cost drivers to allocate its indirect costs: Other Cost pool Costs Cost driver Audit Tax services Length of training sessions x Internal training overhead 150,000 number of conference rooms occupied 640 510 350 IT support 400,000 Number of tickets 1,200 500 300 Researching and interpreting policies and 180,000 Direct labor hours 550 450 200 regulations Total overhead 730,000 How much total overhead cost will be allocated to audit services? 304,000 386,500 146,500 322,500
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