ABC versus traditional costing. Vicki Greenshade. CPA. provides consulting and tax preparation services to her clients. She charges a fee of $100 per hour for each service. Her revenues and expenses for the year are shown in the following income statement:

Vicki has kept records of the following data for cost allocation purposes:

a. Complete the income statement using Vicki's three cost drivers.

b. Recompute the income statements using hours billed as the only allocation base.

c. How might Vicki's decisions be altered if she were to use only hours billed to allocate expenses?

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Revenue Expenses: Filing, scheduling, and data entry Supplies Computer costs Profit Tax Consulting Total $80,000 $120,000 $200,000 40,000 36,000 20,000 $104,000