Question
KasiBersihRumah provides housecleaning services to its clients. The company uses an activity-based costing system for its overhead costs. The company has provided the following data
KasiBersihRumah provides housecleaning services to its clients. The company uses an activity-based costing system for its overhead costs. The company has provided the following data from its activity-based costing system.
Activity Cost Pool | Total Cost (RM) | Total Activity |
Cleaning | 442,068 | 78,800 hours |
Job support | 52,801 | 1,900 jobs |
Client support | 9,170 | 350 clients |
Other | 110,601 | Not applicable |
Total 614,640
The Other activity cost pool consists of the costs of idle capacity and organizationsustaining costs.
One particular client, the Maria family, requested 46 jobs during the year that required a total of 92 hours of housecleaning. For this service, the client was charged RM2,230.
Required:
- Compute the activity rate for the activity cost pools.
(6 marks)
(CLO3:PLO2:C3)
- Using the activity-based costing system, compute customer margin for the of the Maria family.
(6 marks)
(CLO3:PLO2:C4)
- Compute the predetermined overhead rate if the company chooses cleaning hours as the allocation base.
(2 marks)
(CLO3:PLO2:C3)
- Assume the company decides to use traditional system in which the allocation base of ALL costs is based on cleaning hours. Compute the margin for the Maria family.
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