Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Need help with Requirement 4 and so on. Thanks! - Data Table All operating costs other than professional salaries (travel reimbursements, copy costs, secretarial salaries,

Need help with Requirement 4 and so on. Thanks!

image text in transcribed

image text in transcribed

- Data Table All operating costs other than professional salaries (travel reimbursements, copy costs, secretarial salaries, office lease, and so forth) can be assigned to the three activities. Total activity costs, cost drivers, and total usage of those cost drivers are estimated as follows: Total Activity Total Usage by Total Usage by Private Activity Cost Cost Driver Corporate Clients Clients Transporation to clients $ 9,000 Round-trip mileage to clients 2,500 miles 12,500 miles Blueprint copying 30,000 Number of copies 400 copies 600 copies Office support 220,000 Secretarial time 2,500 secretarial hours 2,500 secretarial hours $ 259,000 Total operating overhead Curtis & Company is an architectural firm specializing in home remodeling for private clients and new office buildings for corporate clients. Curtis charges customers at a billing rate equal to 128% of the client's total job cost. A client's total job cost is a combination of (1) professional time spent on the client ($64 per hour cost of employing each professional) and (2) operating overhead allocated to the client's job. Curtis allocates operating overhead to jobs based on professional hours spent on the job. Curtis estimates its five professionals will incur a total of 10,000 professional hours working on client jobs during the year. B (Click the icon to view the operating cost information.) Ann Long hired Curtis to design her kitchen remodeling. A total of 25 professional hours were incurred on this job. In addition, Long's remodeling job required one of the professionals to travel back and forth to her house for a tot of 150 miles. The blueprints had to be copied four times because Long change the plans several times. In addition, 16 hours of secretarial time were used lining up the subcontractors for the job. Read the requirements. Requirement 3. Calculate the activity cost allocation rates that could be used to allocate operating overhead costs to client jobs. . = Determine the formula, then calculate the activity cost allocation rates that could be used to allocate operating overhead costs to client jobs. (Round the rates to the nearest cent.) Total activity cost pool Total activity allocation base Activity cost allocation rate Transportation to clients $ 9,000 15.000 $ Blueprint copying $ 30,000 1,000 Office support $ 220,000 5,000 $ 44.00 per secretarial hour 0.60 per mile $ 30.00 per copy Requirement 4. Calculate the amount that would be billed to Long using ABC costing. Determine the formula, then calculate the amount that would be billed to Long using ABC costing. (Round all amounts to the nearest cent.) Total cost of job Markup percentage Amount billed to client 128%

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_2

Step: 3

blur-text-image_3

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 And Managerial Accounting The Basis For Business Decisions

Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello

19th Edition

1260247937, 978-1260247930

More Books

Students also viewed these Accounting questions