Messages Main Menu Contents Grades Chat Course Contents LON-CAPA PROBLEMS [MODULE 1] PROBLEM #1 [COST ALLOCATION] Curtis & Company is an architectural firm specializing in home remodeling for private clients and new office buildings for corporate clients. Timer Notes Evaluate Curtis & Company charges customers at a billing rate equal to 125% of the client's total job cost. In 2021, a client's total job cost was a combination of two components: 1. professional cost, based on the professional hours spent on the client's job and the firm's average professional salary, and 2. operating cost, allocated to the client's job, using a "single driver" system, with the number of professional hours spent on the job as the cost driver. In December of 2021, Curtis' accountant decided to replace the single driver system for allocating operating costs with an "activity-based costing" system, starting in 2022. For 2021, Curtis estimated its five professional architects would work a total of 11,000 hours on client jobs during the year, and their salaries would total $770,000. As part of the new ABC syste grouped all of the firm's operating costs (travel reimbursements, copy costs, secretarial salaries, office lease, etc.) into just three activities, with the following estimates for these activities: Activity Transportation to clients Blueprint copying Office support Total Activity Cost Cost Driver $10,100 Round-trip mileage to clients $30,000 Number of copies Secretarial time Total Usage by Clients 12,800 miles 950 copies 2,800 hours Total operating costs $183,600 $223,700 In January of 2022, Amy Lee hired Curtis & Company to design her kitchen remodeling. Curtis thinks the job will require 22 hours of professional time. In addition, she estimates that the profess drive a total of 140 miles back and forth to Lee's house, that four sets of blueprints will be required, and that 15 hours of secretarial time will be spent lining up subcontractors, suppliers, etc for REQUIRED [ROUND ALL ALLOCATION RATES TO THE NEAREST CENT AND ALLOCATIONS TO THE NEAREST DOLLAR.] Part A [5 tries; 5 points] What would the total cost of Amy Lee's remodeling job have been under 2021's single driver system? Submit Answer Incorrect. Tries 4/5 Previous Tries Part B [5 tries; 5 points] What is the budgeted total cost of Amy Lee's remodeling job under the activity-based costing system?