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1-5 Data Table All operating costs other than professional salaries (travel reimbursements, copy costs, secretarial salaries, office lease, and so forth) can be assigned to
1-5
Data Table All operating costs other than professional salaries (travel reimbursements, copy costs, secretarial salaries, office lease, and so forth) can be assigned to the three activities. Total activity costs, cost drivers, and total usage of those cost drivers are estimated as follows Total Activity Cost Total Usage by Corporate Clients Total Usage by Private Clients Activity Cost Driver 10,500 miles 250 copies 750 copies 195,000 2,500 secretarial hours hours $ 233,000 Total operating overhead E4-22A (book/static) Question Help Kushner & Company is an architectural firm specializing in home remodeling for private clients and new office buildings for corporate clients. Kushner charges customers at a billing rate equal to 130% of the client's total job cost. A client's total professionals to travel back and forth to her house for a total of 125 miles. The job cost is a combination of (1) professional time spent on the client ($63 per hour blueprints had to be copied four times because Li changed the plans several times cost of employing each professional) and (2) operating overhead allocated to the n addition, 15 hours of secretarial time were used lining up the subcontractors for client's job. Kushner allocates operating overhead to jobs based on professional the job hours spent on the job. Kushner estimates its five professionals will incur a total of 10,000 professional hours working on client jobs during the year EEB (Click the icon to view the operating cost information.) Yimeng Li hired Kushner to design her kitchen remodeling. A total of 25 professional hours were incurred on this job. In addition, Li's remodeling job required one of the Read the requirements. Requirement 1. Calculate the current indirect cost allocation rate per professional hour. (Round your answer to the nearest cent.) The current indirect cost allocation rate per professional hour is $ 1. Calculate the current indirect cost allocation rate per professional hour. 2. Calculate the total amount that would be billed to Li given the current costing structure 3. Calculate the activity cost allocation rates that could be used to allocate operating overhead costs to client jobs. 4. Calculate the amount that would be billed to Li using ABC costing 5. Which type of billing system is more fair to clients? ExplainStep by Step Solution
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