Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Kenosha Winter Services is a small, family - owned snow - removal business. For its services, the company has always charged a flat fee per
Kenosha Winter Services is a small, familyowned snowremoval business. For its services, the company has always charged a flat fee per hundred square metres of snow removal. The current fee is $ per hundred square metres. However, there is some question about whether the company is actually making any money on jobs for some customersparticularly those located on more remote properties that require considerable travel time. The owners daughter, home from school for the summer, has suggested investigating this question using ABC. After some discussion, a simple system consisting of four activity cost pools seemed to be adequate. The activity cost pools and their activity measures appear below:
Activity Cost Pool Activity Measure Activity for the Year
Snow removal Square metres cleaned s hundred square metres
Travel to jobs Kilometres driven kilometres
Job support Number of jobs jobs
Other costs of idle capacity and organizationsustaining costs None NA
The total cost of operating the company for the year is $ which includes the following costs:
Wages $
Supplies
Snow removal equipment depreciation
Vehicle expenses
Office expenses
Presidents compensation
Total cost $
Resource consumption is distributed across the activities as follows:
Distribution of Resource Consumption
across Activity Cost Pools
Snow Removal Travel to Jobs Job Support Other Total
Wages
Supplies
Snow removal equipment depreciation
Vehicle expenses
Office expenses
Presidents compensation
Job support consists of receiving calls from potential customers at the home office, scheduling jobs, billing, resolving issues, and so on
Required:
Prepare the firststage allocation of costs to the activity cost pools. Do not leave any empty spaces; input a wherever it is required. Compute the activity rates for the activity cost pools. Round your answers to decimal places. The company recently completed a squaremetre snow removal job at Hometown Hardwarea kilometre roundtrip journey from Kenoshas offices. Compute the cost of this job using the ABC system. Round your answers to decimal places. The revenue from the Hometown Hardware job was $ square metres at $ per hundred square metres Prepare a report showing the margin from this job. Round your answers to decimal places.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started