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

Required
a. Calculate the cost rates for each activity cost pool.
b. Gia is preparing a proposal for a prospective client, Jason's Juice 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 Gia use the estimated cost information you have calculated to price the service it will provide to Jason's Juice Bar?

Expected Driver Volume Activity Cost Pool Setting up newloyee Processing weekly payroll Weekly reporting Annual tax reporting Total Cost Cost Driver 93,750 Number of new employees 500 2,500,000 $975,000 $375,000 $300,000 Number of paychecks printed Number of clients Number of W-2s printed 80,000