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Gant Accounting Performs Two Types of Services, Audit and Tax

Question 130

Multiple Choice

Gant Accounting performs two types of services, Audit and Tax. Gant's overhead costs consist of computer support, $300,000; and legal support, $150,000. Information on the two services is:  Audit  Tax  Direct labor cost $50,000$100,000 CPU minutes 40,00010,000 Leqal hours used 200800\begin{array}{lrr}&\text { Audit }& \text { Tax }\\\text { Direct labor cost } & \$ 50,000 & \$ 100,000 \\\text { CPU minutes } & 40,000 & 10,000 \\\text { Leqal hours used } & 200 & 800\end{array} Overhead applied to tax services using activity-based costing is


A) $150,000.
B) $180,000.
C) $270,000.
D) $300,000.

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