Kenosha Winter Services is a small family-owned snow-removal business. For its services, the company has always...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
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 $12.75 per hundred square metres. However, there is some question 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 activity measures appear below. Activity Cost Pool Snow renoval Travel to jobs Activity Measure Square metres cleaned (ees) Kilometres driven Job support Number of jobs Other (costs of idle capacity and organization-sustaining costs) None Activity for the Year 32,000 hundred square metres 15,000 kilometres NA 400 jobs The total cost of operating the company for the year is $390,000, which includes the following costs: Wages $150,000 Supplies 40,000 Snow removal equipment depreciation 20,000 Vehicle expenses 40,000 Office expenses 60,000 President's compensation 80,000 Total cost $390,000 Resource consumption is distributed across the activities as follows: Distribution of Resource Consumption across Activity Cost Pools Snow Travel to Job Removal Jobs Support Other Total Wages 80% 100% ex 10x 100% Supplies 100x ex ex 100% Snow removal equipment depreciation 80% ex 20% 100% Vehicle expenses eas 60% 0% 40% 100x Office expenses ens ens 45% 55% 100% President's compensation eas ens 40% 60% 100% Job support consists of receiving calls from potential customers at the home office, scheduling jobs, billing. resolving issues, and so on. Required. 1. Prepare the first-stage allocation of costs to the activity cost pools. (Do not leave any empty spaces; Input a O wherever it is required.) Wages Supplies Snow removal equipment depr Vehicle expenses Office expenses President's compensation Total cost Snow Removal Travel to Jobe Job Support Other Total 2. Compute the activity rates for the activity cost pools. (Round your answers to 2 decimal places.) Activity Cost Pool Snow removal Travel to jobs Job support Activity Rate per hundred square metres per kilometro per job 3. The company recently completed a 3,500-square-metre snow removal job at Hometown Hardware-a 75-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.) Activity Cost Pool ABC Cost Snow removal Travel to jobs Job support Total 4. The revenue from the Hometown Hardware job was $446.25 (3,500 square metres at $12.75 per hundred square metres). Prepare a report showing the margin from this job. (Round your answers to 2 decimal places.) Sales Costs Snow removal Travel to jobs Job support Product margin 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 $12.75 per hundred square metres. However, there is some question 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 activity measures appear below. Activity Cost Pool Snow renoval Travel to jobs Activity Measure Square metres cleaned (ees) Kilometres driven Job support Number of jobs Other (costs of idle capacity and organization-sustaining costs) None Activity for the Year 32,000 hundred square metres 15,000 kilometres NA 400 jobs The total cost of operating the company for the year is $390,000, which includes the following costs: Wages $150,000 Supplies 40,000 Snow removal equipment depreciation 20,000 Vehicle expenses 40,000 Office expenses 60,000 President's compensation 80,000 Total cost $390,000 Resource consumption is distributed across the activities as follows: Distribution of Resource Consumption across Activity Cost Pools Snow Travel to Job Removal Jobs Support Other Total Wages 80% 100% ex 10x 100% Supplies 100x ex ex 100% Snow removal equipment depreciation 80% ex 20% 100% Vehicle expenses eas 60% 0% 40% 100x Office expenses ens ens 45% 55% 100% President's compensation eas ens 40% 60% 100% Job support consists of receiving calls from potential customers at the home office, scheduling jobs, billing. resolving issues, and so on. Required. 1. Prepare the first-stage allocation of costs to the activity cost pools. (Do not leave any empty spaces; Input a O wherever it is required.) Wages Supplies Snow removal equipment depr Vehicle expenses Office expenses President's compensation Total cost Snow Removal Travel to Jobe Job Support Other Total 2. Compute the activity rates for the activity cost pools. (Round your answers to 2 decimal places.) Activity Cost Pool Snow removal Travel to jobs Job support Activity Rate per hundred square metres per kilometro per job 3. The company recently completed a 3,500-square-metre snow removal job at Hometown Hardware-a 75-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.) Activity Cost Pool ABC Cost Snow removal Travel to jobs Job support Total 4. The revenue from the Hometown Hardware job was $446.25 (3,500 square metres at $12.75 per hundred square metres). Prepare a report showing the margin from this job. (Round your answers to 2 decimal places.) Sales Costs Snow removal Travel to jobs Job support Product margin
Expert Answer:
Related Book For
Managerial Accounting
ISBN: 978-1259024900
9th canadian edition
Authors: Ray Garrison, Theresa Libby, Alan Webb
Posted Date:
Students also viewed these accounting questions
-
Composing Social Media Content That Engages the Audience It's a Monday morning in mid-December, and Harris is pleased to show Bob that the theatre's Facebook page, Twitter feed, and blog are up and...
-
JK Company produces two products, Plush and Supreme. JK Company can sell all of the units it can produce for both products, but it has limited production capacity. Machine hours per unit are . 2 5...
-
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 $12.75...
-
Being able to identify an industry to use for benchmarking yourfirm's results with similar companies is frequently not easy. Choose a type of business and go to www.naics.com. This Web site allows...
-
Balance this redox reaction by the half reaction method by assuming an acidic solution. Cr2O72 + Fe ( Cr3+ + Fe3+
-
Which is the better choice when purchasing a $20,000 car: a) A four-year loan at 4 percent, b) An immediate rebate of $2,000 and a four-year loan at 10 percent?
-
What is one half-step above \(G^{\#}\) ? State the requested note.
-
Delby Industries has manufactured prefabricated houses for over 20 years. The houses are constructed in sections to be assembled on customers lots. Delby expanded into the precut housing market when...
-
The yield to maturity on one-year zero-coupon bonds is currently 5 percent; the annual YTM on two-year zerocoupon bond is 6 percent. The federal government plans to issue a two-year maturity coupon...
-
Gasoline Use A random sample of 25 drivers used on average 757 gallons of gasoline per year. The standard deviation of the population is 33 gallons. Use a graphing calculator. Part: 0 / 2 Part 1 of 2...
-
31. A rigid mass-less rod of length L is connected to a disc (pulley) of mass m and radius r = L/4 through a friction-less revolute joint. The other end of that rod is attached to a wall through a...
-
32. The magnitude of reaction force at joint C of the hinge-beam shown in the figure is (round off to 2 decimal places). kN 50kN A 10 kN/m B 3m 3m 4m Hinge
-
34. Consider two exponentially distributed random variables X and Y, both having a mean of 0.50. Let Z= X + Y and r be the correlation coefficient between X and Y. If the variance of Z equals 0, then...
-
36. A rectangular steel bar of length 500 mm, width 100 mm, and thickness 15 mm is cantilevered to a 200 mm steel channel using 4 bolts, as shown. 200 B Steel channel 50 D 50 50 50 100 100 Steel bar...
-
38. The thickness of a steel plate with material strength coefficient of 210 MPa, has to be reduced from 20 mm to 15 mm in a single pass in a two-high rolling mill with a roll radius of 450 mm and...
-
Earlgrey Company eamed net income of $90,000 duringthe year ended December 31, 2024. On December 15, Earlgrey declaredthe annual cash dividendon its 5% preferred stock (par value, $118,000) and a $ 2...
-
Which of the following streaming TV devices does not involve use of a remote controller? A) Google Chromecast B) Apple TV C) Amazon Fire TV D) Roku
-
In the formation stages of a project, are there any distinct advantages to using xPM over APF for an extreme project? If so, identify them.
-
In the formation stages of a project, are there any distinct disadvantages to using APF over xPM for an extreme project? If so, identify them. In considering your answer, think about what is really...
-
As a class exercise, identify three xPM projects and write the POS for one of them.
Study smarter with the SolutionInn App