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

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter7: Allocating Costs Of Support Departments And Joint Products

Section: Chapter Questions

Problem 30E: A company uses charging rates to allocate service department costs to the using departments. The...

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