gEnabled: Assignment 2 Saved Help Save & Exit Submit 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 $ 289,000 IT Support Admin Support Facilities Support 722,000 205,300 Revenue-Generating Departments Assurance 879,400 Tax Advisory 632,000 Business Advisory Book 800,300 $3,528,000 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 35:35:30 ratio, (2) Admin Support costs are allocated using a 50:20:30 ratio, and (3) Facilities Support costs are allocated using a 35:35:30 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 10,400, 8,900, and 7,400 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.) 01:56:29 support Tax Advisory, and Business Advisory using a 35:35:30 ratio, (2) Admin Support costs are allocated using a 50 20:30 ratio, and (3) lue-generating departments as follows: (1) IT Support costs are allocated to Assurance, Facilities Support costs are allocated using a 35:35:30 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 10,400, 8,900, and 7,400 hours, respectively, for the quarter 6:10 Required: 1. Compute the predetermined cost allocation rates for the three revenue-generating departments (Round your answers to 2 decimal places.) Predetermined Cost Allocation Rate Assurance $ 138.74 Tax Advisory $ 126.29 Business Advisory $ 182 82 2. Using the rates computed in Requirement (1) above, assign the costs to clients X and Y. Client X required 480, 620 and 740 hours of professional time, respectively, in the Assurance, Tax Advisory and Business Advisory departments, whereas client Y required 740, 890 and 340 hours of professional time. (Do not round intermediate calculations. Round your answers to the nearest whole dollar.) 2. Using the rates computed in Requirement (1) above, assign the costs to clients X and Y. Client X required 480, 620 and 740 hours of professional time, respectively, in the Assurance, Tax Advisory and Business Advisory departments, whereas client Y required 740, 890 and 340 hours of professional time. (Do not round intermediate calculations. Round your answers to the nearest whole dollar.) 5:56 Client X Assurance Service S Client Y 84,631 95,983 38,392 48,550 $ 61,884 111,519 Tax Advisory Service Business Advisory Service $ 221,962 $ 2190,006 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: Chatine Allocation Base 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: 01:55:41 Activity Cost Pool IT Support Cost Driver (allocation base) Allocation Base Quantity IT time 17,100 hours Admin Support Sales revenue Facilities Support Assurance $69.61 million 24,570 hours 10,400 hours 8,900 hours 7,400 hours Total professional time Assurance professional time Tax advisory professional time Business advisory professional time Tax Advisory Business Advisory Compute the predetermined allocation rate for each activity cost pool. (Round your answers to 2 decimal places.) Activity Cost Pool Activity Rate $ 17.79 per IT support hour IT Support Admin Support 1.00 % of sales revenue Facilities Support $ 8.53 per hour of professional time Assurance $ 90.78 per hour of assurance professional time Tax Advisory $ 78.03 per hour of tax advisory professional time Business Advisory $ 124.50 per hour of business advisory professional time eBook 55:27 4. In addition to the Assurance, Tax Advisory, and Business Advisory time specified in Requirement (2) above, the two clients consumed the following additional resources: ook Resource Client X 490 IT time (hours) Sales revenue Client Y 290 $1,477,800 $985,200 Assign the costs to the two clients using activity-based costing. (Round intermediate calculations to 2 decimal places and final answers to the nearest dollar amount.) Client X Client Y IT Support Admin Support Facilities Support Assurance Tax Advisory Business Advisory $ S 6,404 $ 14,464 12,369 31,773 38,233 76,000 179,243 $ 2,846 9,643 13,478 55,376 59,300 26,164 166,807