Lilty Accounting performs two types of services, audit and tax. Lilty's estimated overhead costs consist of computer support ($327,000) and legal support. The legal support costs are currently unknown.

Complete the question by providing the following information:

1. Determine the total estimated overhead costs for Lilty Accounting, including both computer support and legal support.

2. If the total revenue generated from audit services is $500,000 and from tax services is $700,000, allocate the overhead costs to each service type based on their respective revenue proportions.

Q&A Education