Third of the budgeted overhead cost is incurred to

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third of the budgeted overhead cost is incurred to support the firm’s two partners, and two- thirds goes to support the staff accountants. The current audit bid for Monoco Industries requires $18,000 in direct partner professional labor, $30,000 in direct staff accountant professional labor, $5,000 in direct material, 81. What is the total budgeted compensation for both partners and staff accountants? A. $1,000,000 B. $600,000 C. $1,160,000 D. $1,400,000 E. None of these answers is correct. AACSB: Reflective Thinking AICPA BB: Industry AICPA: FN Reporting Blooms: Apply Difficulty: 2 Medium Learning Objective: 03-08 Feedback A: This amount is incorrect. Feedback B: This amount is incorrect. Feedback C: This amount is incorrect. Feedback D: Correct! Total budgeted compensation = Total partner Comp. + Total staff Comp.; $560,000 + $840,000 = $1,400,000 Feedback E: There is a correct answer listed.
82. What is the overhead rate based on a single cost driver (rounded to the nearest percentage? A. 71% B. 90% C. 210 % D. 83% E. 60% AACSB: Reflective Thinking AICPA BB: Industry AICPA: FN Reporting Blooms: Apply Difficulty: 2 Medium Learning Objective: 03-08 Feedback A: This amount is incorrect. Feedback B: Correct! Budgeted overhead cost ÷ Total compensation = OH based on single cost driver; $1,260,000 ÷ $1,400,000 = 90% Feedback C: This amount is incorrect. Feedback D: This amount is incorrect. Feedback E: This amount is incorrect. 83. What is the overhead rate for partners, if separate rates are used for partners and staff accountants? A. 90% B. 75% C. 60% D. 225% E. 50% AACSB: Reflective Thinking AICPA BB: Industry AICPA: FN Reporting Blooms: Apply Difficulty: 2 Medium Learning Objective: 03-08 Feedback A: This amount is incorrect. Feedback B: Correct! Overhead rate supporting partners = (Total budgeted OH x amount of use estimated) ÷ Partner compensation; ($1,260,000 x 1/3) ÷ $560,000 = 75% Feedback C: This amount is incorrect. Feedback D: This amount is incorrect. Feedback E: This amount is incorrect.
84. What is the overhead rate for staff accountants, if separate rates are used for partners and staff accountants? A. 50% B. 75% C. 66.7% D. 100% E. 150% AACSB: Reflective Thinking AICPA BB: Industry AICPA: FN Reporting Blooms: Apply Difficulty: 2 Medium Learning Objective: 03-08 Feedback A: This amount is incorrect. Feedback B: This amount is incorrect. Feedback C: This amount is incorrect. Feedback D: Correct! Overhead rate supporting staff = (Budgeted overhead x amount of use estimated) ÷ Staff compensation; ($1,260,000 x 2/3) ÷ $840,000 = 100% Feedback E: This amount is incorrect.

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