Gant Accounting performs two types of services, Audit and Tax. Gant’s overhead costs consist of computer support, $336000; and legal support, $168000. Information on the two services is: Audit Tax Direct labor cost$50000$100000CPU minutes4000010000Legal hours used200800Overhead applied to tax services using traditional costing is$336000.$168000.$201600.$302400.

Overheads: It refers to the indirect expenses incurred for the production and selling of goods.

Answered: Gant Accounting performs two types of…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter2: Basic Cost Management Concepts

Section: Chapter Questions

Problem 34P: Mason, Durant, and Westbrook (MDW) is a tax services firm. The firm is located in Oklahoma City and...

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Gant Accounting performs two types of services, Audit and Tax. Gant’s overhead costs consist of computer support, $336000; and legal support, $168000. Information on the two services is:

	Audit	Tax
Direct labor cost	$50000	$100000
CPU minutes	40000	10000
Legal hours used	200	800

Overhead applied to tax services using traditional costing is

$336000.

$168000.

$201600.

$302400.

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