Patrick Payroll Services provides weekly payroll processing for a number of small businesses. Patrick Talbert, the company's owner, has been using an activity-based costing system for several years. He used the following information in preparing this year's budget.

Required
a. Calculate the cost rates for each activity cost pool.
b. Patrick is preparing a proposal for a prospective client, Nelly's Nectar Bar. The client has 20 employees. What is the estimated cost of providing weekly payroll services to this client for the first year?
c. How can Patrick use the estimated cost information you have calculated to price the service it will provide to Nelly's NectarBar?

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Expected Activity Cost Pool Total Cost Cost DriverDriver Volume Processing weekly payroll Weekly reporting Annual tax reporting Setting up new employees 75,000 Number of new employees $780,000 $300,000 $240,000 Number of paychecks printed Number of clients Number of W-2s printed 500 2,500,000 100 60,000