Question

In: Accounting

[5:33 AM, 10/15/2020] فهد الشهري: Alami Accounting performs two types of services, Audit, and Tax. It...

[5:33 AM, 10/15/2020] فهد الشهري: Alami Accounting performs two types of services, Audit, and Tax. It uses computer support and legal support as its 2 main activity cost pools.

CPU minutes and legal hours are being used as the activity cost drivers for the two cost pools respectively.

Alami’s overhead allocation is done as follows: computer support, $240,328; and legal support, $120,099.

More information on the two services is:

Audit Tax
Direct labor cost $50,060 $100,214
CPU minutes 40,108 10,388
Legal hours used 212 817

Alami Accounting performs tax services for Hassan Kane. Direct labor cost is $1,230; 629 CPU minutes were used, and 1 legal hour was use…
[5:33 AM, 10/15/2020] فهد الشهري: Alami Accounting performs two types of services, Audit, and Tax. It uses computer support and legal support as its 2 main activity cost pools.

CPU minutes and legal hours are being used as the activity cost drivers for the two cost pools respectively.

Alami's overhead allocation is done as follows:

computer support, $240,164; and

legal support, $120,133.

More information on the two services is:

Audit Tax
Direct labor cost $50,094 $100,095
CPU minutes 40,281 10,166
Legal hours used 226 809

Calculate the overhead applied to AUDIT SERVICES using activity-based costing and write the answer in the box below:

IMPORTANT!!!

WRITE YOUR ANSWER TO THE CLOSEST 2 DECIMAL POINTS.

Expert Solution

Answers as below for Question 1 and Question 3

unable to answer this Question which is incompletee :Alami Accounting performs tax services for Hassan Kane. Direct labor cost is $1,230; 629 CPU minutes were used, and 1 legal hour was use…

Answer to Question 1
Activity	Cost Driver	Total Cost	Use of Cost driver per activity ( Total of CPU minute and Legal Hour)	Activity based overhead rate
Computer Support	CPU Minute	$2,40,328.00	50496	$4.76
Legal Support	Legal Hour	$1,20,999.00	1029	$117.59

Activity	Cost Driver	Alami	Audit	Tax
Overhead Rate	Use	Cost	Use	Cost	Total Cost
Computer Support	CPU Minute	$4.76	40108	$1,90,887.90	10388	$49,440.10	$2,40,328.00
Legal Support	Legal Hour	$117.59	212	$24,928.85	817	$96,070.15	$1,20,999.00

Answer to Question 3
Activity	Cost Driver	Total Cost ( Total of CPU minute and Legal Hour)	Use of Cost driver per activity ( Total of CPU minute and Legal Hour)	Activity based overhead rate
Computer Support	CPU Minute	$2,40,164.00	50447	$4.76
Legal Support	Legal Hour	$1,20,133.00	1035	$116.07

Activity	Cost Driver	Alami	Audit	Tax
Overhead Rate	Use	Cost	Use	Cost	Total Cost
Computer Support	CPU Minute	$4.76	40281	$1,91,766.53	10166	$48,397.47	$2,40,164.00
Legal Support	Legal Hour	$116.07	226	$26,231.94	809	$93,901.06	$1,20,133.00

ekkarill92 answered 1 year ago

Alejandro Associates is an accounting firm that provides audit and tax services to its clients. Each...

Alejandro Associates is an accounting firm that provides audit and tax services to its clients. Each tax return is considered a "job" for the firm, just like a manufacturing company considers a customer order as a "job." Alejandro has direct costs related to Tax Return 8405 as follows: 8 hours of staff labor @ $123 per hour 6 hours of assembly labor @$168 per hour $62 of materials In addition, Alejandro Associates estimates its overhead related to the manufacture of...

Metlock Financial Services performs bookkeeping and tax-reporting services to startup companies in the Oconomowoc area. On...

Metlock Financial Services performs bookkeeping and tax-reporting services to startup companies in the Oconomowoc area. On January 1, 2020, Metlock entered into a 3-year service contract with Walleye Tech. Walleye promises to pay $10,700 at the beginning of each year, which at contract inception is the standalone selling price for these services. At the end of the second year, the contract is modified and the fee for the third year of services is reduced to $8,600. In addition, Walleye agrees...

Nash Financial Services performs bookkeeping and tax-reporting services to startup companies in the Oconomowoc area. On...

Nash Financial Services performs bookkeeping and tax-reporting services to startup companies in the Oconomowoc area. On January 1, 20X1, Clarke entered into a 3-year service contract with Walleye Tech. Phillip promises to pay $10,800 at the beginning of each year, which at contract inception is the standalone selling price for these services. At the end of the second year, the contract is modified and the fee for the third year of services is reduced to $8,800. In addition, Phillip agrees...

Tax Audit & Notice Services: Requesting Innocent Spouse Relief (2019) Options 5 To be eligible for...

Tax Audit & Notice Services: Requesting Innocent Spouse Relief (2019) Options 5 To be eligible for separation of liability, the taxpayer: a Did not sign the return. b Must be divorced, legally separated, or has not lived with the spouse for the prior 12 months. c Did not have any earned income. d Must request relief before the IRS begins collection activity.

Thrifty Tax Services, Inc. was organized in 2018 to provide tax and accounting services to small...

Thrifty Tax Services, Inc. was organized in 2018 to provide tax and accounting services to small businesses. The following are balance sheet values as of June 1, 2018: Cash $ 1,400 Accounts receivable 750 Supplies 210 Equipment 8,200 Patent 5,900 Accounts payable 600 Notes payable -0- Common Stock 2,000 Additional Paid in Capital 12,000 Retained earnings 1,860 Total $16,460 $16,460 Consider the following transactions that occurred during June 2018: Sold 1,000 shares of $1 par value stock for $10 per share to investors. Borrowed $7,500 from...

Thrifty Tax Services, Inc. was organized in 2017 to provide tax and accounting services to small...

Thrifty Tax Services, Inc. was organized in 2017 to provide tax and accounting services to small businesses. The following are balance sheet values as of January 1, 2018: Cash $ 1,400 Accounts receivable 750 Supplies 210 Equipment 8,200 Patent 5,900 Accounts payable 600 Notes payable -0- Common Stock 2,000 Additional Paid in Capital 12,000 Retained earnings 1,860 Total $16,460 $16,460 Consider the following transactions that occurred during January 2018: Sold 1,000 shares of $1 par value stock for $10 per...

The debate of whether an auditor who performs non-attest services (e.g. Consulting) for an audit client...

The debate of whether an auditor who performs non-attest services (e.g. Consulting) for an audit client will have their independence impaired has been going on for some time in the accounting profession. While Sarbanes-Oxley Act of 2002 expressly restrict auditors from performing consulting and other non-attest services for their audit clients, the AICPA does not have such stringent restrictions. Required: Present an argument why you believe that performing non attest services for an audit client would or would not impair...

1. Consider the following data set: D= (5, 10, 15, 15, 5, 10, 15, 15, 5,...

1. Consider the following data set: D= (5, 10, 15, 15, 5, 10, 15, 15, 5, 10, 15, 15) SD= 4.33 How would you add a number to this set while keeping the SD the same? 2. tossing a coin 50 times A. from the 50 flips compute the proportion of heads from your 50 flips. B. For a 95% confidence level find the z critical value C. compute the 95% confidence interval for p, the margin of error from...

A performs bookkeeping and tax- reporting services to startup companies. On January 1, 2018, A entered...

A performs bookkeeping and tax- reporting services to startup companies. On January 1, 2018, A entered into a 3-year service contract with B. B promises to pay $9,000 at the beginning of each year, which at contract inception is the stand-alone selling price for these services. At the end of the second year, the contract is modified and the fee for the third year of services is reduced to $8,000. In addition, B agrees to pay an additional $22,000 at...

Audits and Reviews are two types of attestation services provided by public accounting firms. Discuss the...

Audits and Reviews are two types of attestation services provided by public accounting firms. Discuss the similarities and differences between these two types of attestation services. Which type provides the most assurance?