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QUESTION #1 Accountants R Us is an accounting rm that serves both individuals and corporations. A clarication is needed to determine which service line is contributing the greater amount to the bottom line. The area of contention is the assignment of overhead. The individual partners argue for assigning overhead on the basis of 23.12596 of direct labour dollars, while the corporate partners argue for implementing activity-based costing. The partners agree to use next year's budgeted data for purposes of analysis and comparison. The following overhead data are collected to develop the comparison. Assign overhead costs to senrices using traditional costing and Activity Based Costing; calcuiate overhead rates; compare results. Estimated Use of Cost Drivers per Service Estimated Activity Best Estimated Use of Pool Coat Driver Overhead Cost Drivers Corporate Individual Employee Direct labour $120000 $1,500.000 $900,000 $?00.000 training dollars Clerical Number of reports 50.000 2,000 500 1,500 and forms Computing Number of 100.000 40,000 1?,000 23,000 minutes Facility rental Number of 100.000 25 14 11 employees Travel Per expense T0000 Direct 40.000 22,000 reports $450000 REQUIRED 3. Using traditional product costing as proposed by the individual partners, calculate the total overhead cost assigned to both services {individual and corporate) of Accountants R Us. I}. 1. Using activity-based costing. prepare a schedule showing the calculations of the activity-based overhead rates (per cost driver}. 2. Prepare a schedule assigning each activity's overhead cost pool to each service based on the use of the cost drivers. c. Classify each of the activities as a value-added activity or a nonvalue-added activity. :1. Comment on the comparative overhead cost of the two service lines under both traditional costing and Activity Based |lilosting