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Gant Accounting Performs Two Types of Services, Audit and Tax

Question 129

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} Gant Accounting performs tax services for Cathy Lane. Direct labor cost is $1,200; 600 CPU minutes were used; and 1 legal hour was used. What is the total cost of the Lane job using activity-based costing?


A) $3,600
B) $3,750
C) $5,400
D) $4,950

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