Curtis & Company is an architectural firm specializing in home remodeling for private clients and new office buildings for corporate clients. Curtis 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 ($69 per hour cost of employing each professional) and (2) operating overhead allocated to the client's job. Curtis allocates operating overhead to jobs based on professional hours spent on the job. Curtis estimates its five professionals will incur a total of 10,000 professional hours working on client jobs during the year. Data table Annika Law hired Curtis to design her kitchen remodeling. A total of 20 professional hours were incurred on this job. In addition, Law's remodeling job required one of the professionals to travel back and forth to her house for a total of 125 miles. The blueprints had to be copied four times because Law changed the plans several times. In addition, 15 hours of secretarial time were used lining up the subcontractors for the job. Read the requirements. ctivity Total Activity Cost Cost Driver Total Usage by Corporate Clients Total Usage by Private Clients ransporation to clients $ 6,000 Round-trip mileage to clients 4,000 miles 11,000 miles lueprint copying 33,000 Number of copies 250 copies 750 copies 205,000 ffice support Secretarial time 2,900 secretarial hours 2,100 secretarial hours $ 244,000 otal operating overhead 1. Calculate the current indirect cost allocation rate per professional hour. 2. Calculate the total amount that would be billed to Law 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 Law using ABC costing. 5. Which type of billing system is more fair to clients? Explain. corporate clients. Curtis 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 ($69 per hour cost of employing each professional) and (2) operating overhead allocated to the client's job. Curtis allocates operating overhead to jobs based on professional hours spent on the job. Curtis estimates its five professionals will incur a total of 10,000 professional hours working on client jobs during the year. Data table incurred on this job. In addition, Law's remodeling job required one of the professionals to travel back and forth to her house for a total of 125 miles. The blueprints had to be copied four times because Law changed the plans several times. In addition, 15 hours of secretarial time were used lining up the subcontractors for the job. Read the requirements. Total Activity ctivity Cost Cost Driver Total Usage by Corporate Clients Total Usage by Private Clients ransporation to clients. $ lueprint copying 33,000 Number of copies... 205,000 6,000 Round-trip mileage to clients.. 4,000 miles 250 copies 11,000 miles 750 copies ffice support. Secretarial time.. 2,900 secretarial hours 2,100 secretarial hours $ 244,000 otal operating overhead 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 $ 26.90 Requirement 2. Calculate the total amount that would be billed to Law given the current costing structure. Determine the formula, then calculate the amount that would be billed to Law given the current costing structure. (Round all amounts to the nearest cent.) Total cost of job 2,222.50 Markup percentage 130% Amount billed to client 3,022.60 Requirement 3. Calculate the activity cost allocation rates that could be used to allocate operating overhead costs to client jobs. Determine the formula, then calculate the activity cost allocation rates that could be used to allocate operating overhead costs to client jobs. (Round the rates to the neare Total activity cost pool Transportation to clients 5 Blueprint copying Office support 6,000 38,000 225,000 Total activity allocation base 15,000 1,000 5,000 Activity cost allocation rate $0.40 per mile $38.00 per copy $ 45.00 per secretarial hour Requirement 4. Calculate the amount that would be billed to Law using ABC costing Determine the formula, then calculate the amount that would be billed to Law using ABC costing. (Round all amounts to the nearest cent.) Total cost of job 2,564.00 Markup percentage 136% Amount billed to client 3,487.04