AJ Accounting performs two types of services, Audit and Tax. AJ's overhead costs consist of computer support, $200,000; and legal support, $100,000. Information on the two services is:
Direct labor cost $50,000 $100,000
CPU minutes 40,000 10,000
Legal hours used 200 800
Overhead applied to audit services using activity-based costing is
Selected Answer: C. $200,000.
Correct Answer: A. $180,000.
My question is how do you come up with 180,000© BrainMass Inc. brainmass.com June 4, 2020, 12:52 am ad1c9bdddf
This solution provides the calculations for allocation and overhead applied in the attached Excel file.