Question
The accounting department of a large limousine company is analyzing the costs of its services. The cost data and level of activity for the past
The accounting department of a large limousine company is analyzing the costs of its services. The cost data and level of activity for the past 16 months follow:
Month Special Analyses Customer Accounts Paychecks Processed Accounting Service Costs 1 2 325 1,029 $ 63,800 2 4 310 993 68,900 3 2 302 1,268 64,000 4 1 213 1,028 61,300 5 2 222 984 61,600 6 0 214 712 50,800 7 1 131 762 51,020 8 1 123 739 54,300 9 0 115 708 50,500 10 2 296 1,232 64,800 11 2 213 978 58,000 12 1 222 929 57,500 13 2 217 1,059 62,200 14 2 132 942 54,900 15 4 300 1,299 71,530 16 4 315 1,283 64,800 Totals 30 3,650 15,945 $959,950Page 199 In addition to the information on the previous page, you learn that the accounting department had the following total costs for the past 16 months for each of the following:
Total cost of paychecks processed $180,100 Total cost of maintaining customer accounts 109,600 Total cost of performing special analyses 120,000 Total fixed costs (total for 16 months) 550,250 Total costs $959,950 Required
What is the cost per unit for (1) paychecks processed, (2) customer accounts maintained, and (3) special analyses performed?
Assuming the following level of cost-driver volumes for a month, what are the accounting departments estimated costs of doing business using the account analysis approach?
1,000 paychecks processed
200 customer accounts maintained
3 special analyses
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