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Exercise 9-47 (Algo) Activity-Based versus Traditional Costing-Ethical Issues (LO 9-3, 4, 5) Wendy Chen established Windy City Coaching (WCC) to provide teen counseling and executive
Exercise 9-47 (Algo) Activity-Based versus Traditional Costing-Ethical Issues (LO 9-3, 4, 5) Wendy Chen established Windy City Coaching (WCC) to provide teen counseling and executive coaching services to its clients. WCC charges a $300 fee per hour for each service. The revenues and costs for the year are shown in the following income statement. WINDY CITY COACHING Income Statement Revenue Expenses: Administrative support Transportation, etc Equipment Profit Teen Counseling $66,000 Executive Coaching $123,000 Total $189,000 43,000 31,280 19,600 $ 95,120 WCC has kept good records of the following data for cost allocation purposes. Activity Level Activity Providing administrative support Traveling Using equipment Cost Driver Number of clients Number of visits Computer hours Teen Counseling Executive Coaching 6 100 4 130 800 600 Required: a. Complete the income statement using activity-based costing and WCC's three cost drivers. b. Recompute the income statement using direct labor-hours as the only allocation base (230 hours for teen counseling; 400 hours for executive coaching). Required: a. Complete the income statement using activity-based costing and WCC's three cost drivers. b. Recompute the income statement using direct labor-hours as the only allocation base (230 hours for teen counseling; 400 hours for executive coaching). Complete this question by entering your answers in the tabs below. Required A Required B Complete the income statement using activity-based costing and WCC's three cost drivers. (Do not round intermediate calculations.) Account Teen Counseling Executive Coaching Total Revenue $ 66,000 $ 123,000 $ 189,000 Expenses: Administrative support Transportation, etc Equipment Profit 43,000 31,280 19,600 $ 95,120 < Required A Required B > Complete this question by entering your answers in the tabs below. Required A Required B Recompute the income statement using direct labor-hours as the only allocation base (230 hours for teen counseling; 400 hours for executive coaching). (Do not round intermediate calculations and round your final answers to the nearest whole dollar.) Account Revenue $ Expenses Profit Teen Counseling Executive Coaching Total 66,000 $ 123,000 $ 189,000 93,880 $ 95,120 < Required A Required B >
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