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Please no handwriting Liandy & Pneh Bhd is founded by Mr Liandy and Ms Pneh, in year 2019. The company operates in approximately 5 countries
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Liandy & Pneh Bhd is founded by Mr Liandy and Ms Pneh, in year 2019. The company operates in approximately 5 countries and has an annual revenue of about $2 million. Liandy Housecleaning Sdn Bhd is a subsidiary of Liandy & Pneh Bhd that provides housecleaning services to its clients. The company uses an activity-based costing system for its overhead costs. The company has provided the following data from its activity-based costing system. Activity Cost Pool Cleaning Job support Client support Total Total Cost Activities RM 442,068 78,800 52,801 1,900 9,170 350 Not 110,000 applicable 614,039 hours jobs clients Other Total The "Other" activity cost pool consists of the costs of idle capacity and organization- sustaining costs. One particular client, the Tang family, requested 46 jobs during the year that required a total of 92 hours of housecleaning. For this service, the client was charged $2,230. Required: a) Compute the activity rates (i.e., cost per unit of activity) for the activity cost pools. Round off all calculations to the nearest whole cent. (9 marks) b) Using the activity-based costing system, compute the customer margin for the Tang family. Round off all calculations to the nearest whole cent. (12 marks) c) Assume the company decides instead to use a traditional costing system in which ALL costs are allocated to customers on the basis of cleaning hours. Compute the margin for the Lason family. Round off all calculations to the nearest whole cent. (9 marks) [Total = 30 marks]Step by Step Solution
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