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A consulting firm provides services with three complexity levels: Basic, Intermediate, and Advanced. The company incurs overhead costs of $800,000, which it allocates based on
A consulting firm provides services with three complexity levels: Basic, Intermediate, and Advanced. The company incurs overhead costs of $800,000, which it allocates based on the following cost drivers:
Basic: Number of clients (estimated at 300 clients)
Intermediate: Number of transactions (estimated at 600 transactions)
Advanced: Number of projects (estimated at 100 projects) Allocate the overhead costs to each service using activity-based costing with complexity levels and transaction drivers.
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