The Coletti Cleaning Brigade Company provides housecleaning services to its clients. The company uses an activity-based costing system for its overhead costs. The company has provided the following data from its activity-based costing system.

The ?Other? activity cost pool consists of the costs of idle capacity and organization-sustaining costs.

One particular client, the Tubman family, requested 21 jobs during the year that required a total of 84 hours of housecleaning. For this service, the client was charged $1,490.

Required:

a. Using the activity-based costing system, compute the customer margin for the Tubman family.

b. Assume the company decides instead to use a traditional costing system in which ALL costs are allocated to customers on the basis of cleaning hours. Compute the margin for the Tubman family.

Activity Cost Pool Cleaning Job support Client support Other Total Cost $299,976 75,722 3,063 147,000 Total $525,761 Total Activity 43,100 hours 4,820 jobs 166 clients Not applicable