PROBLEM #1 [COST ALLOCATION]

Curtis & Company is an architectural firm specializing in home remodeling for private clients and new office buildings for corporate clients.

Grades Timer IER Evaluate Feedback Print O Info Course Contents PROBLEM #1 [COST ALLOCATION Curtis & Company is an architectural firm specializing in home remodeling for private clients and new office buildings for corporate clients Curtis & Company charges customers at a billing rate equal to 140% of the client's total job cost. A client's total job cost is a combination of 1) professional cost based on the professional hours spent on the client's job, and 2) operating costs allocated to the client's job. Curtis currently allocates operating costs to jobs based on the number of professional hours spent on the job Curtis estimates its five professionals will work a total of 8,000 hours on client jobs during the year, and their salaries will total $720,000. All operating costs other than professional salaries (travel reimbursements, copy costs, secretarial salaries, office lease, etc.) can be grouped into three activities. Relevant information for these activities are estimated as follows: Total Usage by Total Usage by Total Activity Activity Cost Cost Driver Corporate Clients Private Clients Round-trip mileage to Transportation to clients $11,100 2,800 miles 13,000 miles clients Blueprint copying 34,600 Number of copies 150 copies 900 copies Office support 190,100 2,800 hours Secretarial time 2,100 hours $235,800 Total operating costs Amy Lee hired Curtis & Company to design her kitchen remodeling. A total of 22 professional hours were spent on this job. In addition, Amy's remodeling job required one of the professionals to travel back and forth to her house for a total of 140 miles. The blueprints had to be copied four times because Amy changed the plans several times. In addition, 15 hours of secretarial time were used lining up the subcontractors for the job REQUIRED CROUND ALL ALLOCATION RATES TO THE NEAREST CENT AND ALLOCATIONS TO THE NEAREST DOLLAR.1 Part A [5 tries; 5 points] What is the total cost of Amy Lee's remodeling job under the current system? 4517.765 Tries 2/6 Part B 5 tries, 5 points] What would be the total cost of Amy Lee's remodeling job under an activity-based costing system? HE3EERE Tries 0/6