g Enabled: Assignment 2 25:35 ok Saved KV Accounting and Business Consultants provides a variety of consulting services to a diverse range of clients. The company has three support departments and three revenue generating departments, whose cost details for a typical quarter are presented below: Support Departments IT Support $ 269,500 Admin Support 696,000 Facilities Support 192,950 Revenue Generating Departments Assurance 826,100 Tax Advisory 593,000 Business Advisory 760,000 $3,337,550 The existing cost allocation system is designed as follows: (1) the support department costs are allocated to the three revenue- generating departments, and (2) the revenue-generating department costs are allocated to individual clients. The support department costs are allocated to the revenue-generating departments as follows: (1) IT Support costs are allocated to Assurance. Tax Advisory. and Business Advisory using a 30:30:40 ratio, (2) Admin Support costs are allocated using a 40:30:30 ratio, and (3) Facilities Support costs are allocated using a 40:40:20 ratio. The costs accumulated in the three revenue-generating departments are allocated to individual clients based on the professional time consumed in the respective department. The Assurance, Tax Advisory, and Business Advisory departments recorded 9,100, 7,600, and 6,100 hours, respectively, for the quarter. Required: 1. Compute the predetermined cost allocation rates for the three revenue-generating departments. (Round your answers to 2 decimal places.) Assurance Tax Advisory Business Advisory Predetermined Cost Allocation Rate < Prev 4 of 4 Next Enabled: Assignment 2 Saved 2. Using the rates computed in Requirement (1) above, assign the costs to clients X and Y. Client X required 350, 490 and 610 hours of professional time, respectively, in the Assurance, Tax Advisory and Business Advisory departments, whereas client Y required 610, 760 and 210 hours of professional time. (Do not round intermediate calculations. Round your answers to the nearest whole dollar.) Client X Client Y Assurance Service Tax Advisory Service 04 Business Advisory Service $ 0 $ 0 3. You have recently learned about activity-based costing and decide to use six activity cost pools, one for each department. The additional information you have collected is as follows: Activity Cost Pool IT Support Admin Support Facilities Support Assurance Tax Advisory Business Advisory IT time Sales revenue Cost Driver (allocation base) Total professional time: Assurance professional time. Tax advisory professional time. Business advisory professional time Allocation Base Quantity 15,150 hours $ 69.42 million 22,620 hours 9,100 hours: 7,600 hours 6,100 hours: Compute the predetermined allocation rate for each activity cost pool. (Round your answers to 2 decimal places.) Activity Cost Pool IT Support Admin Support Facilities Support Assurance Activity Rate per IT support hour % of sales revenue per hour of professional time per hour of assurance professional time < Prev 4 of 4 Next > 01:24:46 eBook Compute the predetermined allocation rate for each activity cost pool. (Round your answers to 2 de Activity Cost Pool IT Support Admin Support Facilities Support Assurance Tax Advisory Business Advisory Activity Rate per IT support hour % of sales revenue per hour of professional time per hour of assurance professional time per hour of tax advisory professional time per hour of business advisory professional time. 4. In addition to the Assurance, Tax Advisory, and Business Advisory time specified in Requirement (2) E consumed the following additional resources: Resource IT time (hours) Sales revenue Client X Client Y 360 160 $1,442,700 $961,800 Assign the costs to the two clients using activity-based costing. (Round intermediate calculations to 2 d answers to the nearest dollar amount.) IT Support Admin Support Facilities Support Assurance Client X Client Y Tax Advisory Business Advisory 0 $