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er at man ved commanding mac e Frederick Company to account for some wheel ander s Cong managers have died for manag ting the budgeted activity costs for the upcoming you and the action be well in Checcon lo view the b ed costs and a bove) Frederick Company expect to produce 1,000 chrom wheels during the year the whole spected to 2.750 pr. 15 Josed 250 p regred 3 setups and consumed 16 wg hours Jo 510 wed 450 p r ed s pand consumed 300 gram consume 1.700 hours of th e for each Requirement 1. Compute the cost allocation Festety the competene for at Frederick Company uses ABC to account for its chrome wheel manufacturing process. Company managers have identified four manufacturing activities that incur manufacturing overhead costs: materials nishing. The budgeted activity costs for the upcoming year and their allocation bases are as follows (Click the icon to view the budgeted costs and activity bases.) Frederick Company expects to produce 1,000 chrome wheels during the year. The wheels are expected to use 2.750 parts, require 15 setups, and consume 1,700 hours of finishing time. Job 420 used 250 parts, required 3 setups, and consumed 140 finishing hours Job 510 used 450 parts, required 5 setups, and consumed 300 x Requirements - A Read the tsurements Requirement 1. Compute the cost allocation rate for each activity. First identif 1. Compute the cost allocation rate for each activity 2. Compute the manufacturing overhead cost that should be assigned to Job 420 3. Compute the manufacturing overhead cost that should be assigned to Job 510. Farris & Company is an architectural firm specializing in home remodeling for private clients and new office buildings for corporate clients. Farris charges customers at a billing rate equal to 130% of the client's total job cost. A client's total job cost is a combination of (1) professional time spent on the client ($69 per hour cost of employing each professional) and (2) operating overhead allocated to the client's job. Farris allocates operating overhead to jobs based on professional hours spent on the job. Farris 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) Alyse Lalonde hired Farris to design her kitchen remodeling. A total of 35 professional hours were incurred on this job. In addition, Lalonde's remodeling job required one of the professionals to travel back and forth to her house for a total of 125 miles. The blueprints had to be copied four times because Lalonde changed the plans several times. In addition, 13 hours of secretarial time were used lining up the subcontractors for the job. Read the requirements 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 $ Requirements 1. 2. 3. Calculate the current indirect cost allocation rate per professional hour. Calculate the total amount that would be billed to Lalonde 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 Lalonde using ABC costing. Which type of billing system is more fair to clients? Explain. 4. 5. Print Done private clients and new office buildings for corporate clients. Farris charges professional hours were incurred on this job. In addition, Lalonde's remodeling customers at a billing rate equal to 130% of the client's total job cost. A client's job required one of the professionals to travel back and forth to her house for a total job cost is a combination of (1) professional time spent on the client (569 per total of 125 miles. The blueprints had to be copied four times because Lalonde hour cost of employing each professional) and (2) operating overhead allocated changed the plans several times. In addition, 13 hours of secretarial time were to the client's job. Farris allocates operating overhead to jobs based on used lining up the subcontractors for the job. professional hours spent on the job. Farris estimates its five professionals will incur a total of 10,000 professional hours working on client jobs during the year. bed the Read the requirements (Click the icon to view the operating cost information) 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 $ . 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 Activity Transporation to clients ..... $ Blueprint copying ......... Office support ........... - Activity Cost Cost Driver 9,000 Round-trip mileage to clients.... 30,000 Number of copies . ...... 220.000 Secretarial time ............ Total Usage by Corporate Clients 2,500 miles 200 copies 2,100 secretarial hours by Private Clients 12,500 miles 800 copies 2,900 secretarial hours Total operating overhead $ 259.000 Print Done er at man ved commanding mac e Frederick Company to account for some wheel ander s Cong managers have died for manag ting the budgeted activity costs for the upcoming you and the action be well in Checcon lo view the b ed costs and a bove) Frederick Company expect to produce 1,000 chrom wheels during the year the whole spected to 2.750 pr. 15 Josed 250 p regred 3 setups and consumed 16 wg hours Jo 510 wed 450 p r ed s pand consumed 300 gram consume 1.700 hours of th e for each Requirement 1. Compute the cost allocation Festety the competene for at Frederick Company uses ABC to account for its chrome wheel manufacturing process. Company managers have identified four manufacturing activities that incur manufacturing overhead costs: materials nishing. The budgeted activity costs for the upcoming year and their allocation bases are as follows (Click the icon to view the budgeted costs and activity bases.) Frederick Company expects to produce 1,000 chrome wheels during the year. The wheels are expected to use 2.750 parts, require 15 setups, and consume 1,700 hours of finishing time. Job 420 used 250 parts, required 3 setups, and consumed 140 finishing hours Job 510 used 450 parts, required 5 setups, and consumed 300 x Requirements - A Read the tsurements Requirement 1. Compute the cost allocation rate for each activity. First identif 1. Compute the cost allocation rate for each activity 2. Compute the manufacturing overhead cost that should be assigned to Job 420 3. Compute the manufacturing overhead cost that should be assigned to Job 510. Farris & Company is an architectural firm specializing in home remodeling for private clients and new office buildings for corporate clients. Farris charges customers at a billing rate equal to 130% of the client's total job cost. A client's total job cost is a combination of (1) professional time spent on the client ($69 per hour cost of employing each professional) and (2) operating overhead allocated to the client's job. Farris allocates operating overhead to jobs based on professional hours spent on the job. Farris 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) Alyse Lalonde hired Farris to design her kitchen remodeling. A total of 35 professional hours were incurred on this job. In addition, Lalonde's remodeling job required one of the professionals to travel back and forth to her house for a total of 125 miles. The blueprints had to be copied four times because Lalonde changed the plans several times. In addition, 13 hours of secretarial time were used lining up the subcontractors for the job. Read the requirements 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 $ Requirements 1. 2. 3. Calculate the current indirect cost allocation rate per professional hour. Calculate the total amount that would be billed to Lalonde 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 Lalonde using ABC costing. Which type of billing system is more fair to clients? Explain. 4. 5. Print Done private clients and new office buildings for corporate clients. Farris charges professional hours were incurred on this job. In addition, Lalonde's remodeling customers at a billing rate equal to 130% of the client's total job cost. A client's job required one of the professionals to travel back and forth to her house for a total job cost is a combination of (1) professional time spent on the client (569 per total of 125 miles. The blueprints had to be copied four times because Lalonde hour cost of employing each professional) and (2) operating overhead allocated changed the plans several times. In addition, 13 hours of secretarial time were to the client's job. Farris allocates operating overhead to jobs based on used lining up the subcontractors for the job. professional hours spent on the job. Farris estimates its five professionals will incur a total of 10,000 professional hours working on client jobs during the year. bed the Read the requirements (Click the icon to view the operating cost information) 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 $ . 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 Activity Transporation to clients ..... $ Blueprint copying ......... Office support ........... - Activity Cost Cost Driver 9,000 Round-trip mileage to clients.... 30,000 Number of copies . ...... 220.000 Secretarial time ............ Total Usage by Corporate Clients 2,500 miles 200 copies 2,100 secretarial hours by Private Clients 12,500 miles 800 copies 2,900 secretarial hours Total operating overhead $ 259.000 Print Done