Answered step by step
Verified Expert Solution
Link Copied!

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 hundred square metres of

image text in transcribed

image text in transcribed

image text in transcribed

image text in transcribed

Kenosha Winter Services is a small, family-owned snow-removal business. For its services, the company has always charged a flat fee per hundred square metres of snow removal. The current fee is $10.30 per hundred square metres. However, there is some questlon about whether the company is actually making any money on jobs for some customers-particularly those located on more remote properties that require considerable travel time. The owner's 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 actlvity measures appear below: The total cost of operating the company for the year is $480,000, which includes the following costs: Resource consumption is distributed across the activities as follows: Job support consists of receiving calls from potential customers at the home office, scheduling jobs, billing, resolving issues, and on. Required: 1. Prepare the first-stage allocation of costs to the activity cost pools. (Do not leave any empty spaces; input a 0 wherever it is required.) 2. Compute the activity rates for the activity cost pools. (Round your answers to 2 decimal places.) 3. The company recently completed a 4,700-square-metre snow removal job at Hometown Hardware-a 87-kilometre round-trip journey from Kenosha's offices. Compute the cost of this job using the ABC system. (Round your answers to 2 decimal places.) 4. The revenue from the Hometown Hardware job was $484.10 ( 4,700 square metres at $10.30 per hundred square metres). Prepare a report showing the margin from this job. (Round your answers to 2 decimal places.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting A Valuation Emphasis

Authors: John S. Hughes, Frances L. Ayres, Robert E. Hoskin

1st Edition

0471203599, 978-0471203599

More Books

Students also viewed these Accounting questions

Question

If the job involves a client load or caseload, what is it?

Answered: 1 week ago

Question

What abilities are possible because humans use symbols?

Answered: 1 week ago