Requirement 1. Calculate the current indirect cost allocation rate per professional hour (Round your answer to the nearest cent.) The current indirect cost allocation rate per professional hour is $ 26.90 Requirement 2. Calculate the total amount that would be billed to Law given the current costing structure Determine the formula, then calculate the amount that would be billed to Law given the current costing structure. (Round all amounts to the nearest cent.) Total cost of job 2,222.50 X x Markup percentage 136% Amount billed to client $ 3,022.60 $ 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 neare Total activity cost pool / Total activity allocation base Activity cost allocation rate Transportation to clients $ 6,000 15,000 $ 0.40 per mile Blueprint copying 38,000 1,000 $ 38.00 per copy Office support 225,000 5,000 $ 45,00 per secretarial hour Requirement 4. Calculate the amount that would be billed to Law using ABC costing. Determine the formula, then calculate the amount that would be billed to Law using ABC costing. (Round all amounts to the nearest cent.) Total cost of job X Markup percentage Amount billed to client $ 2,564.00 x 138% $ 3,487.04 The ABC bilingom is more for todients because they are charged ccording to the resources they used For example, copying blueprints is very expensive Under the farer system, dients we charged according to the number of blueprint coples that their job required. The fare system beffer recognized the extent to which perating costs are incurred by each unique client job. G e t you and then click Check Monson & Company is an architectural firm specializing in home remodeling for private clients and new office buildings for corporate clients. Monson charges customers at a billing rate equal to 126% of the client's total job cost. A client's total job cost is a combination of (1) professional time spent on the client ($62 per hour cost of employing each professional) and (2) operating overhead allocated to the client's job. Monson allocates operating overhead to jobs based on professional hours spent on the job. Monson 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.) Anne Little hired Mons this job. In addition, Lite house for a total of 120 several times. In additio Read the requirements. i 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 Total Usage Total Usage Activity by Corporate by Private Activity Cost Cost Driver Clients Clients Transporation to clients ..... $ 6,000 Round-trip mileage to clients .... 6,000 miles 9 ,000 miles Blueprint copying 34,000 Number of copies .......... 600 copies 400 copies Office support 185,000 Secretarial time . 2,200 secretarial 2,800 secretarial hours hours 225,000 Total operating overhead Anne Little hired Monson to design her kitchen remodeling. A total of 35 professional hours were incurred on this job. In addition, Little's remodeling job required one of the professionals to travel back and forth to her house for a total of 120 miles. The blueprints had to be copied four times because Little changed the plans several times. In addition, 21 hours of secretarial time were used lining up the subcontractors for the job. Resul Read the requirements
