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Curtis & Company is an architectural firm specializing in home remodeling for private clients and new office buildings for corporate clients. Curtis charges customers
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 130% of the client's total job cost. A client's total job cost is a combination of (1) professional time spent on the client ($66 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. (Click the icon to view the operating cost information.) Requirements 1. 2. 3. Calculate the current indirect cost allocation rate per professional hour. Calculate the total amount that would be billed to Larson 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 Larson using ABC costing. 4. 5. Which type of billing system is more fair to clients? Explain. t cent.)
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