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10. The Thornes Cleaning Brigade clients. The company uses an a omnes Cleaning Brigade Company provides housecleaning services to its he company uses an activity-based
10. The Thornes Cleaning Brigade clients. The company uses an a omnes Cleaning Brigade Company provides housecleaning services to its he company uses an activity-based costing system for its overhead costs company has provided the following data from its activity-based costing system Activity Cost Pool Cleaning Job support................ Client support Other Total.... Total Cost $274 170 99,066 9.796 110.000 $493.032 Total Activity 48 100 hours 5.700 jobs 620 clients Not applicable The "Other activity cost pool consists of the costs of idle capacity and organization- sustaining costs. One particular client, the Lazzara family requested 37 jobs during the year that required a total of 222 hours of housecleaning. For this service, the client was charged $2,350 Required: a. Using the activity-based costing system, compute the customer margin for the Lazzara family. Round off all calculations to the nearest whole cent. (7 points) 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 Lazzara family. Round off all calculations to the nearest whole cent. (6 points)
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