Question
An accounting firm uses activity-based costing. The firm has to drop one of the following three customers, which consume the following activities. Xavier Young Zanes
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An accounting firm uses activity-based costing. The firm has to drop one of the following three customers, which consume the following activities.
Xavier Young Zanes Direct costs $10,000 $50,000 $25,000 Partner hours 120 250 110 Filings 10 15 17 Interview hours 100 350 250
The accounting firm has the following budgeted activity cost pool information.
Cost pool Activity driver Activity driver Consulting $500,000 Partner hours 320 Filing $250,000 Filings 200 Customer Service $1,250,000 Interview hours 5,000
Xavier is contracted to pay $650,000. Young is contracted to pay $1,000,000. Zanes is contracted to pay $750,000.
What is the optimal profit that can be earned from these customers?
a. $884,375
b. $922,250
c. $868,125
d. $1,337,500
An accounting firm uses activity-based costing. The firm has to drop one of the following three customers, which consume the following activities.
| Xavier | Young | Zanes | |
| Direct costs | $10,000 | $50,000 | $25,000 |
| Partner hours | 120 | 250 | 110 |
| Filings | 10 | 15 | 17 |
| Interview hours | 100 | 350 | 250 |
The accounting firm has the following budgeted activity cost pool information.
| Cost pool | Activity driver | Activity driver | |
| Consulting | $500,000 | Partner hours | 320 |
| Filing | $250,000 | Filings | 200 |
| Customer Service | $1,250,000 | Interview hours | 5,000 |
Xavier is contracted to pay $650,000. Young is contracted to pay $1,000,000. Zanes is contracted to pay $750,000.
What is the optimal profit that can be earned from these customers?
| a. | $884,375 | |
| b. | $922,250 | |
| c. | $868,125 | |
| d. | $1,337,500 |
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Data Analytics Using Excel Microsoft 365 With Accounting And Finance Datasets Version 3.0
Authors: Joseph Manzo
1st Edition
145333758X, 9781453337585
