Teri Martin Nerdmeister, CPA provides bookkeeping and tax services to her clients She charges a fee of $60 per hour for bookkeeping and $90 an hour for tax services Martin estimates the following overhead costs for the upcoming year Office Supplies $16,000 Computer fees 24,000 Secretary's salary 30,000 Rent 18,000 $88,000 Operating profits declined last year and Ms Martin has decided to use activity based coating (ABC) procedures to evaluate her hourly fees She gathered the following info from last year's records Top of Form Activity Bottom of Form Cost Driver Bookkeeping Tax Services Office Supplies Hours billed 1200 800 Computer fees Computer hours used 400 600 Secretary's salary Number of clients 16 84 Rent Types of services used 1 1 Bottom of Form 1 What is the total cost allocated to the bookkeeping services using activity based costing Based on the information in question 3 Martin wants her hourly fees for the tax services to be 160 of their activity based costs What is the fee per hour for tax services in the upcoming year

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Aug 11, 2024

Teri Martin Nerdmeister, CPA provides bookkeeping and tax services to her clients. She charges a fee of $60 per hour for bookkeeping and $90 an

Teri Martin Nerdmeister, CPA provides bookkeeping and tax services to her clients. She charges a fee of $60 per hour for bookkeeping and $90 an hour for tax services. Martin estimates the following overhead costs for the upcoming year:

Office Supplies $16,000

Computer fees 24,000

Secretary's salary 30,000

Rent 18,000

$88,000

Operating profits declined last year and Ms. Martin has decided to use activity based coating (ABC) procedures to evaluate her hourly fees. She gathered the following info from last year's records:

Top of Form Activity Bottom of Form	Cost Driver	Bookkeeping	Tax Services
Office Supplies	Hours billed	1200	800
Computer fees	Computer hours used	400	600
Secretary's salary	Number of clients	16	84
Rent	Types of services used	1	1 Bottom of Form

1. What is the total cost allocated to the bookkeeping services using activity-based costing?

Based on the information in question #3 Martin wants her hourly fees for the tax services to be 160% of their activity-based costs. What is the fee per hour for tax services in the upcoming year?