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Using ABC to bill clients at a service firm (Learning Objective 2) Kushner & Company is an architectural firm specializing in home remodeling for private

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Using ABC to bill clients at a service firm (Learning Objective 2) Kushner & Company is an architectural firm specializing in home remodeling for private dients and new office buildings for corporate clients. Kushner charges customers at a billing rate equal to 130% of the client's total job b cost is a combination of (1) professional time spent on the client A client's total jo ($63 per hour cost of employing each professional) and (2) operating overhead allocated to the client's job. Kushner allocates operating overhead to jobs based on professional hours spent on the job. Kushner estimates its five professionals will incur a total of 10,000 al hours working on client jobs during the year 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 by Corporate Clients Total u Activity S 6,000 Round-trip mileage to clients .4,500 miles 10,500 miles 195.000 Secretarial time.2,500 secretarial 2,500 secretarial by Private Clients ctivity ansportation to clients.. ueprint copying32,000 Number of copies250 copies ffice support Cost Cost Driver hours hours al operating overhead $233,000 Yimeng Li hired Kushner to design her kitchen remodeling. A total of 25 professional hours were incurred on this job. In addition, Li's remodeling job required one of the pro- fessionals to travel back and forth to her house for a total of 125 miles. The blueprints had to be copied four times because Li changed the plans several times. In addition, 15 hours of secretarial time were used lining up the subcontractors for the job

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