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 IT Support Admin Support Facilities Support Revenue Generating Departments Assurance Tax Advisory Business Advisory $ 278,500 708,000 198,650 850,700 611,000 778,600 $3,425,450 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 40 20 40 ratio, (2) Admin Support costs are allocated using a 40 30 30 ratio, and (3) Facilities Support costs are allocated using a 40:40:20 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 9,700, 8,200, and 6.700 hours, respectively, for the quarter Assurance Tax Advisory Business Advisory 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 2. Using the rates computed in Requirement (1) above, assign the costs to clients X and Y. Client X required 410, 550 and 670 hours of professional time, respectively, in the Assurance, Tax Advisory and Business Advisory departments, whereas client Y required 670, 820 and 270 hours of professional time. (Do not round intermediate calculations. Round your answers to the nearest whole dollar) Assurance Service Tax Advisory Service Business Advisory Service $ Client X 0 $ Client Y 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: Activity Cost Pool 11 Support Admin Support Facilities Support Assurance Tax Advisory Business Advisory Activity Cost Pool IT Support Admin Support Facilities Support Assurance Cost Driver (allocation base) Compute the predetermined allocation rate for each activity cost pool (Round your answers to 2 decimal places) Tax Advisory Business Advisory IT time Sales revenue Total professional time Assurance professional time Tax advisory professional time Business advisory professional time Activity Rate per IT support hour % of sales revenue Allocation Base Quantity 16,050 hours $ 69.50 million 23,520 hours 9,700 hours 8,200 hours 6,700 hours per hour of professional time per hour of assurance professional time per hour of tax advisory professional time per hour of business advisory professional time 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: Resource IT time (hours) Sales revenue IT Support Admin Support Facilities Support Assurance 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.) Tax Advisory Business Advisory Client X 420 Client X Client Y 220 $1,458,900 $972,600 0 $ Client Y 0