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Answer plz Adler & Company is an architectural firm specializing in home remodeling for private clients and new office buildings for corporate clients. Adler charges
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Adler & Company is an architectural firm specializing in home remodeling for private clients and new office buildings for corporate clients. Adler charges customers at a billing rate equal to 138% of the client's total job cost. A client's total job cost is a combination of (1) professional time spent on the client ($62 per hour cost of employing each professional) and (2) operating overhead allocated to the client's job. Adler allocates operating overhead to jobs based on professional hours spent on the job. Adler estimates its five professionals will incur a total of 10,000 professional hours working on client jobs during the year. (Click the icon to view the operating cost information.) Anne Lee hired Adler to design her kitchen remodeling. A total of 35 professional hours were incurred on this job. In addition, Lee's remodeling job required one of the professionals to travel back and forth to her house for a total of 135 miles. The blueprints had to be copied four times because Lee changed the plans several times. In addition, 18 hours of secretarial time were used lining up the subcontractors for the job. Read the requirements - X Requirements Determine the formula, then calculate the activity cost allocation rates that could be used to allocate operating overhead costs to client jobs = Activity cost allocation ratu Transportation to clients + per mile Blueprint copying + per copy Office support + per secretarial hour 1. Calculate the current indirect cost allocation rate per professional hour. 2. Calculate the total amount that would be billed to Lee 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 Lee using ABC costing. 5. Which type of billing system is more fair to clients? Explain. = Requirement 4. Calculate the amount that would be billed to Lee using ABC costing Determine the formula, then calculate the amount that would be billed to Lee using ABC coating. (Round all amounts to the nearest cent.) = Amount billed to client Print Done operating receiving Requirement 5. Which type of billing system is more fair to clients? Explain. selling The billing system is more fair to clients because they are charged according to For example, copying blueprints is . Under the fairer system, clients are charged incurred by each unique client job. y blueprint copies that their job required. The fairer system better recognized the extent to which Y costs are Time Remaining: 03:21:29 Next Adler & Company is an architectural firm specializing in home remodeling for private clients and new office buildings for corporate clients. Adler charges customers at a billing rate equal to 138% of the client's total job cost. A client's total job cost is a combination of (1) professional time spent on the client (562 per hour cost of employing each professional) and (2) operating overhead allocated to the client's job. Adler allocates operating overhead to jobs based on professional hours spent on the job. Adler estimates its five professionals will incur a total of 10,000 professional hours working on client jobs during the year. (Click the icon to view the operating cost information.) Anne Lee hired Adler to design her kitchen remodeling. A total of 35 professional hours were incurred on this job. In addition, Lee's remodeling job required one of the professionals to travel back and forth to her house for a total of 135 miles. The blueprints had to be copied four times because Lee changed the plans several times. In addition, 18 hours of secretarial time were used lining up the subcontractors for the job. Read the requirements. . X Data Table 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 27.1 Requirement 2. Calculate the total amount that would be billed to Lee given the current costing structure. . Determine the formula, then calculate the amount that would be billed to Lee given the current costing structure. (Round all amounts to the ne = Amount billed to client 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 Total Usage Activity by Corporate Total Usage by Activity Cost Cost Driver Clients Private Clients Transporation to Round-trip clients...........$ 12,000 mileage to clients. 3,000 miles 12.000 miles Blueprint copying 34,000 Number of copias. 300 copies 700 copies 2,400 secretarial 2,600 secretarial Office support.... . hours hours Total operating $ 271,000 overhead......... R 225,000 Secretarial time Operating overhead D Total cost of job + vity cost allocation rates that could be used to allocate operating overhead costs to client jobs. ate the activity cost allocation rates that could be used to allocate operating overhead costs to client jobs. = Activity cost allocation rate = per mile + = | per copy per secretarial hour Transportation to clients Blueprint copying Office support Print DoneStep by Step Solution
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