1. Kav question

KV Accounting and Business Consultants provides a variety of consulting services to a diverse range of clients. The company has three support departments and three revenue-generating departments, whose cost details for a typical quarter are presented below: Support Departments $ 269,500 IT Support Admin Support Facilities Support 696,000 192,950 Revenue-Generating Departments Assurance 826,100 Tax Advisory 593,000 Business Advisory 760,000 $3,337,550 The existing cost allocation system is designed as follows: (1) the support department costs are allocated to the three revenue- generating departments, and (2) the revenue-generating department costs are allocated to individual clients. The support department costs are allocated to the revenue-generating departments as follows: (1) IT Support costs are allocated to Assurance, Tax Advisory, and Business Advisory using a 30:30:40 ratio, (2) Admin Support costs are allocated using a 40:30:30 ratio, and (3) Facilities Support costs are allocated using a 40:40:20 ratio. The costs accumulated in the three revenue-generating departments are allocated to individual clients based on the professional time consumed in the respective department. The Assurance, Tax Advisory, and Business Advisory departments recorded 9,100, 7,600, and 6,100 hours, respectively, for the quarter. Required: 1. Compute the predetermined cost allocation rates for the three revenue-generating departments. (Round your answers to 2 decimal places.) Predetermined Cost Allocation Rate Assurance Tax Advisory g Enabled: Assignment 2 Saved Help Save & Exit 1. Compute the predetermined cost allocation rates for the three revenue-generating departments. (Round your answers to 2 decimal places.) Predetermined Cost Allocation Rate Assurance Tax Advisory 01:42:55 Business Advisory Book 2. Using the rates computed in Requirement (1) above, assign the costs to clients X and Y. Client X required 350, 490 and 610 hours of professional time, respectively, in the Assurance, Tax Advisory and Business Advisory departments, whereas client Y required 610, 760 and 210 hours of professional time. (Do not round intermediate calculations. Round your answers to the nearest whole dollar.) Client X Client Y Assurance Service Tax Advisory Service Business Advisory Service $ 0 $ 0 about activity based costing and decide to use six activity cost pools, one for each department. The Subm 3. You have recently learned about activity-based costing and decide to use six activity cost pools, one for each department. The additional information you have collected is as follows: 01:42:43 Activity Cost Pool Cost Driver (allocation base) Allocation Base Quantity IT Support IT time 15,150 hours Admin Support Sales revenue $69.42 million Facilities Support Assurance Total professional time 22,620 hours Assurance professional time. Tax Advisory 9,100 hours 7,600 hours Business Advisory Tax advisory professional time Business advisory professional time 6,100 hours Compute the predetermined allocation rate for each activity cost pool. (Round your answers to 2 decimal places.) Activity Cost Pool Activity Rate IT Support per IT support hour Admin Support % of sales revenue Facilities Support per hour of professional time Assurance per hour of assurance professional time Tax Advisory per hour of tax advisory professional time Business Advisory per hour of business advisory professional time www www Prev 1 of 4 eBook aw Next > 4. In addition to the Assurance, Tax Advisory, and Business Advisory time specified in Requirement (2) above, the two clients consumed the following additional resources: 2:32 Resource IT time (hours) Client X Client Y 360 160 $1,442,700 $961,800 Sales revenue Assign the costs to the two clients using activity-based costing. (Round intermediate calculations to 2 decimal places and final answers to the nearest dollar amount.) Client X Client Y IT Support Admin Support Facilities Support Assurance Tax Advisory Business Advisory $ 0 S 0