question 7

Curtis Company is criming home corporate Curtis charger cost is a contion of (1) pro 2) operating overhead sheets Curie w hou spent on the job. Curtistes wing that wouling Out Anda Another mlynchro staf 195 These bandono in the theoret 10.000 working on ITB Click the Haquement that we were you wster The curent entrect contacto e per professional her 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 totaljob cost is a combination of (1) professional time spent on the client ($67 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. (Click the icon to view the operating cost information) Anna Levesque hired Curtis job. In addition, Levesque's total of 125 miles. The bluepri addition, 17 hours of secretar Read the requirements. 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 4,500 miles 10,500 miles Blueprint copying 34,000 Number of copies 600 copies 400 copies Office support 180,000 Secretarial time 2,000 secretarial hours 3,000 secretarial hours $ 223,000 Total operating overhead Print Done e pe Requirements 1. 2. 3. Calculate the current indirect cost allocation rate per professional hour. Calculate the total amount that would be billed to Levesque given the current costing structure. Calculate the activity cost allocation rates that could be used to allocate operating overhead costs to client jobs. Calculate the amount that would be billed to Levesque using ABC costing. Which type of billing system is more fair to clients? Explain. 4. 5. Print Done