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The Kamienski Cleaning Brigade Company provides housecleaning services to its clients. The company uses an activity - based costing system for its overhead costs. The
The Kamienski Cleaning Brigade Company provides housecleaning services to its clients. The company uses an activitybased costing system for its overhead costs. The company has provided the following data from its activitybased costing system.
tableActivity Cost Pool,Total Cost,Total ActivityCleaning$ hoursJob support,$ jobsClient support,$ clientsOther$Not applicableTotal$
The "Other" activity cost pool consists of the costs of idle capacity and organizationsustaining costs. One particular cllent, the Whiddon family, requested jobs during the year that required a total of hours of housecleaning. For this service, the client was charged $
Required:
a Using the activitybased costing system, compute the customer margin for the Whiddon family. Round off all calculations to the nearest whole cent.
b Assume the company decides instead to use a traditional costing system in which ALL costs are allocated to customers on the basis of cleaning hours. Compute the margin for the Whiddon family?
Note: Round off all calculations to the nearest whole cent.
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