| 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: |
| Activity | Total Activity Cost | Cost Driver | Total Usage by Corporate Clients | Total Usage by Private Clients |
| Transporation to clients. . . . | $12,000 | Round-trip mileage to clients. . | 4,500 miles | 10,500 miles |
| Blueprint copying. . . . . . . . . | 32,000 | Number of copies. . . . . . . . . . . | 500 copies | 500 copies |
| Office support. . . . . . . . . . . . | 185,000 | Secretarial time. . . . . . . . . . . . . | 2,900 secretarial hours | 2,100 secretarial hours |
| Total operating overhead. . . | $229,000 | |
Warren & Company is an architectural firm specializing in home remodeling for private clients and new office buildings for corporate clients. Warren charges customers at a billing rate equal to 126% of the client's total job cost. A client's total job cost is a combination of (1) professional time spent on the client ($63 per hour cost of employing each professional) and (2) operating overhead allocated to the client's job. Warren allocates operating overhead to jobs based on professional hours spent on the job. Warren estimates its five professionals will incur a total of 10,000 professional hours working on client jobs during Meredith Blaz hired Warren & Company to design her kitchen remodeling. A total of 20 professional hours were incurred on this job. In addition, Blaz's remodeling job required one of the professionals to travel back and forth to her house for a total of 140 miles. The blueprints had to be copied four times because Blaz changed the plans several times. In addition, 20 hours of secretarial time were used lining up the subcontractors for the job. the year. Read the requirements. (Click the icon to view the operating cost information.) 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 Requirement 2. Calculate the total amount that would be billed to Meredith Blaz given the current costing structure. Determine the formula, then calculate the amount that would be billed to Meredith Blaz given the current costing structure. (Round all amounts to the nearest cent.) X Amount billed to client X = Requirement 3. Calculate the activity cost allocation rates that could be used to allocate operating overhead costs to client jobs. Choose from any list or enter any number in the input fields and then continue to the next question. ? Warren & Company is an architectural firm specializing in home remodeling for private clients and new office buildings for corporate clients. Warren charges customers at a billing rate equal to 126% of the client's total job cost. A client's total job cost is a combination of (1) professional time spent on the client ($63 per hour cost overhead allocated to the client's job professional hours spent on the job. Requirements 10,000 professional hours working o (Click the icon to view the opera Meredith Blaz hired Warren & Company to design her kitchen remodeling. A total of 20 professional hours were incurred on this job. In addition, Blaz's remodeling job required one of the professionals to travel back and forth to her house for a total of 140 miles. The blueprints had He plans several times. In addition, 20 hours of - X ctors for the job. 1. 2. 3. Calculate the current indirect cost allocation rate per professional hour. Calculate the total amount that would be billed to Meredith Blaz given the current costing structure. Calculate the activity cost allocation rates that could be used to allocate operating overhead costs to client jobs. Calculate the amount that would be billed to Meredith Blaz using ABC costing. Which type of billing system is more fair to clients? Explain. Requirement 5. Which type of billing 4. 5. The billing system is md For example, copying blueprints is their job required. The fairer system better Print Done Choose from any list or enter any Murret Momputer and LICITUUMILITUS L WHICAT qucun
