Question
Advising Services Home Association (ASHA) is a consulting firm which offers professional guidance, advice, and solutions to different home-based businesses that experience any problem on
Advising Services Home Association (ASHA) is a consulting firm which offers professional guidance, advice, and solutions to different home-based businesses that experience any problem on which they might need help. ASHA provides consulting services in the 10 largest markets in the US and uses a job-order costing system to accumulate the cost of client projects. Traceable costs are charged directly to individualclients;incontrast,othercostsincurredbyASHA,butnotidentifiablewith specific clients, are charged to jobs by using a predetermined overhead application rate. Clients are billed for directly chargeable costs, overhead, and a markup.
MileyDanke,ASHA'scontroller,anticipatesthefollowingcostsfor20X7:
Percentage of Cost Directly Cost Traceable to Clients Professional staff salaries $3,750,000 80% Administrative support staff 450,000 60% Photocopying 75,000 90% Travel 375,000 90% Other operating costs 150,000 50%% Total $4,800,000Step by Step Solution
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