1. Tax return #1562 had actual direct labor of 120 hours, at an average rate of $55 per hour, and generated revenue of $6,000.How much total cost is included in cost of services for the year for tax return #1562?

2.Audit job #612 had actual direct labor of 100 hours, at a total direct labor cost of $8,000, and generated revenue of $15,000.How much total cost is included in cost of services for the year for audit job #612?

3.At the end of the year, MKG will adjust their cost of services for over or under applied overhead.What effect will this adjustment have on MKG's net income for the year?(e.g., increase by $10, decrease by $20, or no effect).

4.MKG allocates overhead to the two departments based on direct labor hours.Name one other possible alternative driver for the overhead.

why MKG might prefer to use your alternative rather than direct labor hours ?

why MKG might prefer to use direct labor hours rather than your alternative?

5. A colleague has pointed out that although we allocate tax department overhead by number of returns, it is probably not correct that every return requires the exactly the same amount of overhead resources.What are three factors that MKG would want to consider before deciding whether or not to increase the accuracy of their cost system (by, for example, finding a better driver)?

Answer rating: 100% (QA)

1 The total cost included in cost of services for tax return 1562 is 7600 55hour 120 hours ... View the full answer