An accounting firm uses activity-based costing. The firm has to drop one of the following three...
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An accounting firm uses activity-based costing. The firm has to drop one of the following three customers, which consume the following activities. Direct costs Partner hours Filings Interview hours Xavier Young Zanes $10,000 $50,000 $25,000 250 110 15 17 350 250 120 10 100 The accounting firm has the following budgeted activity cost pool information. Cost pool Activity driver Activity driver Consulting $500,000 Partner hours 320 Filing $250,000 Filings 200 Customer Service $1,250,000 Interview hours 5,000 Xavier is contracted to pay $650,000. Young is contracted to pay $1,000,000. Zanes is contracted to pay $750,000. What is the optimal profit that can be earned from these customers? An accounting firm uses activity-based costing. The firm has to drop one of the following three customers, which consume the following activities. Direct costs Partner hours Filings Interview hours Xavier Young Zanes $10,000 $50,000 $25,000 250 110 15 17 350 250 120 10 100 The accounting firm has the following budgeted activity cost pool information. Cost pool Activity driver Activity driver Consulting $500,000 Partner hours 320 Filing $250,000 Filings 200 Customer Service $1,250,000 Interview hours 5,000 Xavier is contracted to pay $650,000. Young is contracted to pay $1,000,000. Zanes is contracted to pay $750,000. What is the optimal profit that can be earned from these customers?
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Related Book For
Management Accounting
ISBN: 978-0132570848
6th Canadian edition
Authors: Charles T. Horngren, Gary L. Sundem, William O. Stratton, Phillip Beaulieu
Posted Date:
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