DATA FOR TASK B 2018 BUDGETED DATA FOR THE ADVISORY SERVICE Budgeted billable hours 5000 hours of billable work Charge out rate per hour $210 00 per billable hour Professional labour $95 00 per billable hour Variable overhead $60,000 see 'overhead' note below Fixed overhead $142,000 Overhead costs Budgeted Variable and Fixed overhead rates are determined by dividing the budgeted (fixed or variable) overhead by the budgeted billable hours This rate is used to apply overhead to each job as it is performed and eventually billed to the client 2018 ACTUAL COSTS FOR THE ADVISORY SERVICE Actual billable hours 5900 Charge out rate per hour $210 00 per hour Actual professional hours worked 6000 Actual professional hours paid $97 00 per hour Actual variable overhead $56,000 Actual fixed overheads $162,000 ADDITIONAL DATA COLLECTED ON OVERHEAD COSTS FOR ABC CALCULATIONS 2019 Budgeted Overhead costs for T K Solutions have been assigned to the following activity related cost pools Overhead Cost Pool Budgeted Overhead Costs $ Cost (activity) driver Total Expected Activity Facility related 96,000 Floor Space 380 sqm Technical Support 24,000 of IT requests 136 requests Administrative 160,000 Billable hours 14,130 billable hours Client Travel 82,000 Km's travelled 2320 km Advertising 48,000 clients 200 clients Expected usage by division Tax Bookkeeping Advisory Billable hours 5,600 1,830 6,700 Floor Space 130 55 195 IT requests 46 15 75 Km's travelled 330 80 1,910 clients 73 19 108 TASK B SCHEDULE 2 Prepare a Flexible Budget for the Advisory department for the year 2018 Billable hours Actual Flexible Budget Static Budget 5900 5900 5000 Revenue 1,239,000 1,239,000 1,050,000 Professional (direct) labour 582,000 560,500 475,000 Variable Overhead 56,000 70,800 60,000 Fixed Overhead 162,000 142,000 142000 Profit Loss 439,000 465,700 373,000 TASK B SCHEDULE 3 SUMMARY OF VARIANCES F U Professional Labour Rate Variance $12,000 U Professional Labour Efficiency Variance $95,000 U Variable Spending Variance $514,000 F Variable Efficiency Variance $95,000 U Fixed Spending Variance $20,000 U 1 Fixed Volume Variance $333,000 F Professional (Direct) Labour ACT QTY x ACT PRICE ACT QTY x STD PRICE STD QTY x STD PRICE 6,000 $97 00 6,000 $95 00 5,000 $95 $582,000 $570,000 $475,000 $12,000 $95,000 Variable Overhead ACTUAL ACT QTY X STD PRICE STD QTY x STD PRICE 6,000 $95 5,000 $95 VOH $56,000 $570,000 $475,000 $514,000 $95,000 Fixed Overhead ACTUAL BUDGET APPLIED FOH $162,000 $142,000 $475,000 $20,000 $333,000 CALCULATIONS FOR SCHEDULE 3 2019 Budgeted Overhead Calculations Add column names as appropriate EXISTING OVERHEAD ALLOCATION Tax Bookkeeping Advisory ACTIVITY BASED COSTING ALLOCATION OF OVERHEAD COSTS Activity by service Cost per service Activity Cost Cost driver Total cost driver Cost per cost driver Tax Bookkeeping Advisory Tax Bookkeeping Advisory facility related $96,000 floor space 380 $252 63 130 55 195 $32,842 11 $13,894 74 $49,263 16 technical support $24,000 of IT request 136 $176 47 46 15 75 $8,117 65 $2,647 06 $13,235 29 adminstrative $160,000 billiable hours 14136 $11 32 5,600 1,830 6,700 $63,384 27 $20,713 07 $75,834 75 client travel $82,000 km's travelled 2320 $35 34 330 80 1,910 $11,663 79 $2,827 59 $67,508 62 advertising $48,000 clients 200 $240 00 73 19 108 $17,520 00 $4,560 00 $25,920 00 Total $133,527 81 $44,642 45 $231,761 82 Total overhead $410,000 Total Billable hours 14,130 OH rate $29 02 OH COST ADVISORY $194,409 06 OH Cost Bookkeeping $53,099 79 OH Cost Tax $162,491 15 TASK B SCHEDULE 4 Prepare a comparison of overhead allocation Existing OH Allocation ABC Allocation OH Rate OH Rates Per Billable hour Per Activity $29 02 Facility related $252 63 Technical Support $176 47 Administrative $11 32 Client Travel $35 34 Advertising $240 00 OH costs by service (total $) OH costs by service (total $) Tax Tax $133,527 81 Bookkeeping Bookkeeping $44,642 45 Advisory 194,409 09 Advisory $231,762 question please analyze that comparison of the overhead allocation to each service unit under both methods, traditional and Activity Based Costing (ABC), which method is better for this company

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DATA FOR TASK B: ? ? ? ? ? 2018 BUDGETED DATA FOR THE ADVISORY SERVICE ? ? ? ? ? Budgeted billable hours 5000

DATA FOR TASK B:	?	?	?	?	?
2018 BUDGETED DATA FOR THE ADVISORY SERVICE	?	?	?	?	?
Budgeted billable hours	5000	hours of billable work	?	?	?
Charge out rate per hour	$210.00	per billable hour	?	?	?
Professional labour	$95.00	per billable hour	?	?	?
Variable overhead	$60,000	see 'overhead' note below		?	?
Fixed overhead	$142,000	see 'overhead' note below		?	?
Overhead costs: Budgeted Variable and Fixed overhead rates are determined by dividing the budgeted (fixed or variable) overhead by the budgeted billable hours. This rate is used to apply overhead to each job as it is performed and eventually billed to the client.				?	?
				?	?
				?	?
?	?	?	?	?	?
2018 ACTUAL COSTS FOR THE ADVISORY SERVICE	?	?	?	?	?
Actual billable hours	5900	?	?	?	?
Charge out rate per hour	$210.00	per hour	?	?	?
Actual professional hours worked	6000	?	?	?	?
Actual professional hours paid	$97.00	per hour	?	?	?
Actual variable overhead	$56,000	?	?	?	?
Actual fixed overheads	$162,000	?	?	?	?
?	?	?	?	?	?
?	?	?	?	?	?
ADDITIONAL DATA COLLECTED ON OVERHEAD COSTS FOR ABC CALCULATIONS	?	?	?	?	?
2019 Budgeted Overhead costs for T&K Solutions have been assigned to the following activity related cost pools:	?	?	?	?	?
Overhead Cost Pool:	Budgeted Overhead Costs $	Cost (activity) driver	Total Expected Activity		?
Facility related	96,000	Floor Space	380	sqm	?
Technical Support	24,000	# of IT requests	136	requests	?
Administrative	160,000	Billable hours	14,130	billable hours	?
Client Travel	82,000	Km's travelled	2320	km	?
Advertising	48,000	# clients	200	clients	?
?	?	?	?	?	?
Expected usage by division:	Tax	Bookkeeping	Advisory	?	?
Billable hours	5,600	1,830	6,700	?	?
Floor Space	130	55	195	?	?
# IT requests	46	15	75	?	?
Km's travelled	330	80	1,910	?	?
# clients	73	19	108	?	?

TASK B SCHEDULE 2:	Prepare a Flexible Budget for the Advisory department for the year 2018	?	?	?	?
?	?	?	?	?	?
Billable hours	Actual	?	Flexible Budget	?	Static Budget
Billable hours	5900	?	5900	?	5000
?	?	?	?	?	?
Revenue	1,239,000	?	1,239,000	?	1,050,000
Professional (direct) labour	582,000	?	560,500	?	475,000
Variable Overhead	56,000	?	70,800	?	60,000
Fixed Overhead	162,000	?	142,000	?	142000
Profit / Loss	439,000	?	465,700	?	373,000

TASK B SCHEDULE 3:	?	?	?	?	?	?	?	?
?	?	SUMMARY OF VARIANCES				?	?	?
?	?	?	?	?	F/U	?	?	?
?	?	?	Professional Labour Rate Variance	-$12,000	U	?	?	?
?	?	?	Professional Labour Efficiency Variance	-$95,000	U	?	?	?
?	?	?	Variable Spending Variance	$514,000	F	?	?	?
?	?	?	Variable Efficiency Variance	-$95,000	U	?	?	?
?	?	?	Fixed Spending Variance	$20,000	U	1	?	?
?	?	?	Fixed Volume Variance	$333,000	F	?	?	?
?
?
Professional (Direct) Labour
ACT QTY	x	ACT PRICE	ACT QTY	x	STD PRICE	STD QTY	x	STD PRICE
6,000	?	$97.00	6,000	?	$95.00	5,000	?	$95
?	$582,000	?	?	$570,000	?	?	$475,000	?
?	?	-$12,000	?	?	-$95,000	?	?	?
?	?	?	?	?	?	?	?	?
Variable Overhead
?	ACTUAL	?	ACT QTY	X	STD PRICE	STD QTY	x	STD PRICE
?	?	?	6,000	?	$95	5,000	?	$95
?	VOH	$56,000	?	$570,000	?	?	$475,000	?
?	?	$514,000	?	?	-$95,000	?	?	?
?	?	?	?	?	?	?	?	?
Fixed Overhead
?	ACTUAL	?	?	BUDGET	?	?	APPLIED	?
FOH	$162,000	?	?	$142,000	?	?	$475,000	?
?	?	$20,000	?	?	$333,000	?	?	?

CALCULATIONS FOR SCHEDULE 3: 2019 Budgeted Overhead Calculations	?	?	?	?	?	?	?	?	?	?
?	Add column names as appropriate	?	?	?	?	?	?	?	?	?
EXISTING OVERHEAD ALLOCATION:	?	?	?	Tax	Bookkeeping	Advisory	?	?	?	?
?	?	?	?	?	?	?	?	?	?	?
?	?	?	?	?	?	?	?	?	?	?
?	?	?	?	?	?	?	?	?	?	?
?	?	?	?	?	?	?	?	?	?	?
?	?	?	?	?	?	?	?	?	?	?
ACTIVITY BASED COSTING ALLOCATION OF OVERHEAD COSTS	?	?	?	?	Activity by service			Cost per service
Activity	Cost	Cost driver	Total cost driver	Cost per cost driver	Tax	Bookkeeping	Advisory	Tax	Bookkeeping	Advisory
facility related	$96,000	floor space	380	$252.63	130	55	195	$32,842.11	$13,894.74	$49,263.16
technical support	$24,000	# of IT request	136	$176.47	46	15	75	$8,117.65	$2,647.06	$13,235.29
adminstrative	$160,000	billiable hours	14136	$11.32	5,600	1,830	6,700	$63,384.27	$20,713.07	$75,834.75
client travel	$82,000	km's travelled	2320	$35.34	330	80	1,910	$11,663.79	$2,827.59	$67,508.62
advertising	$48,000	# clients	200	$240.00	73	19	108	$17,520.00	$4,560.00	$25,920.00
?	?	?	?	?	?	?	Total	$133,527.81	$44,642.45	$231,761.82
Total overhead	$410,000	?	?	?	?	?	?	?	?	?
Total Billable hours	14,130	?	?	?	?	?	?	?	?	?
OH rate=	$29.02	?	?	?	?	?	?	?	?	?
OH COST ADVISORY	$194,409.06	?	?	?	?	?	?	?	?	?
OH Cost Bookkeeping	$53,099.79	?	?	?	?	?	?	?	?	?
OH Cost Tax	$162,491.15	?	?	?	?	?	?	?	?	?

TASK B SCHEDULE 4:	Prepare a comparison of overhead allocation :
?	?	?	?
Existing OH Allocation	?	ABC Allocation	?
OH Rate:	?	OH Rates:	?
Per Billable hour	?	Per Activity	?
Per Billable hour	$29.02	Facility related	$252.63
?	?	Technical Support	$176.47
?	?	Administrative	$11.32
?	?	Client Travel	$35.34
?	?	Advertising	$240.00
OH costs by service (total $)	?	OH costs by service (total $)	?
Tax	?	Tax	$133,527.81
Bookkeeping	?	Bookkeeping	$44,642.45
Advisory	194,409.09	Advisory	$231,762

question

please analyze that comparison of the overhead allocation to each service unit under both methods, traditional and Activity-Based Costing (ABC), which method is better for this company?