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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

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