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(c) A major client has requested accounting services. However, Jane is already billing 100% of her capacity (2,000 hours per year) and is reluctant to
(c) A major client has requested accounting services. However, Jane is already billing 100% of her capacity (2,000 hours per year) and is reluctant to shift 200 hours away from her tax and legal services to meet this client's request. What is the minimum fee per hour that Jane could charge this client for accounting services and is no worse off than last year? Assume that Activity-Based Costing ABC is used.
4) Jane Smith, CPA, provides accounting and tax and legal services to her clients. In 2010, she charged $175 per hour for accounting and $200 per hour for tax and legal services. She estimates the following costs for the year 2010. Office supplies, advertising and miscellaneous Computer fees Secretary's salary Rent S 32,000 48,000 50,000 S166,000 Operating profits declined last year and Ms. Smth has decided to use activity based costing (ABC) procedures to evaluate her hourly fees. She has gathered the following information from last year's fecords ctivity Levels Cost Driver Tax and legal services Activity Accounting Office Supplies Computer fees s sala Hours billed Computer hour used Number of clients Types of services offered 1,000 250 32 1,000 750 168 RentStep by Step Solution
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