Can I have some help with the attached? This involves knowledge of cost strategies and activity based costing.

Clark, Long, Winters and Smith. partner total hours worked total billable hours Budgeted Income Statement For the year ending 2016 Revenues Fees from clients Less expenses Partner's compensation Paralegal compensation Office staff expenses Other office expenses Library and research support Travel expenses Telephone Photocopying Rent Heat Taxes Insurance Accounting Total expenses Operating profit $10,000,000.00 $4,000,000.00 $800,000.00 $120,000.00 $72,000.00 $90,000.00 $100,000.00 $20,000.00 $10,000.00 $24,000.00 $6,000.00 $18,000.00 $15,000.00 $5,000.00 $5,280,000.00 $4,720,000.00 tner total hours worked l billable hours 8000 6400 percent billable Traditional Job Costing per Partner Hour Direct Cost Professional Compensation Overhead Costs Partner's Compensation Paralegal compensation Office staff expenses Other office expenses Library and research support Travel expenses Telephone Photocopying Rent Heat Taxes Insurance Accounting Total Overhead Overhead Rate per Productive hour 80% paralegal total hours worked total billable hours r Hour cost per hour $3,200,000.00 $800,000.00 $800,000.00 $120,000.00 $72,000.00 $90,000.00 $100,000.00 $20,000.00 $10,000.00 $24,000.00 $6,000.00 $18,000.00 $15,000.00 $5,000.00 $2,080,000.00 $325.00 percent billable hours Exhibit 4 Traditional Costing Compared with ABC COSTS ASSIGNED TO CLIENTS FOR THE MONTH OF JANUARY TRADITIONAL COSTING CLIENT A B C D E DIRECT PROFESSIONAL TIME RATE PER HOUR NUMBER OF HOURS $ 500 35 $ 500 120 $ 500 90 $ 500 210 $ 500 70 ACTIVITY-BASED COSTING client A B C D E PROFESSIONAL TIME COST POOL DATA TO ASSIGN COSTS ASSOCIATED WITH ACTIVITY-BASED COSTING ALLOCATIONS Cost Driver Rate Traditional cost Partners charge rate is 500 per hour Traditional cost Paralegal charge rate is 40 per hour ABC cost Partners charge rate is per hour ABC cost Paralegal charge rate is per hour Paralegal hours by major client A 100 B 250 C 400 D 750 E 300 Total for month 1800 Travel associated with clients A B C D E Total travel Library and research support A B $ $ $ $ $ $ 3,000.00 400.00 2,500.00 2,100.00 8,000.00 HOURS SPENT 10 15 Telephone C D E Total hours spent 0 25 22 72 A B C D E Total hours spent 2 5 10 15 10 42 Photocopying A B C D E 3 10 5 10 12 40 mpared with ABC R THE MONTH OF JANUARY SIONAL TIME TOTAL $ $ $ $ $ 17,500 60,000 45,000 105,000 35,000 Job Order Cost Milestone 1 OVERHEAD BILLED TO CLIENT RATE PER HOUR NUMBER OF HOURS TOTAL $ 325 35 $ 11,375 $ 325 120 $ 39,000 $ 325 90 $ 29,250 $ 325 210 $ 68,250 $ 325 70 $ 22,750 PARALEGAL TIME COST POOL Partners Bill rate is Paralegal bill rate is A B C D E Total for month Partners hours by major cleint 35 120 90 210 70 525 Activity Based Cost Analysis Milestone 2 TRAVEL LIBRARY 800 200 per hour per hour t Milestone 1 TOTAL COST ALLOCATED TO CLIENTProfessional Bill $ 28,875 $ 28,000 $ 99,000 $ 96,000 $ 74,250 $ 72,000 $ 173,250 $ 168,000 $ 57,750 $ 56,000 Analysis Milestone 2 TELEPHONE PHOTOCOPYING BILL TO CLIENT Paralegal Bill AMOUNT BILLED TO CLIENT $ 20,000 $ 48,000 $ 50,000 $ 146,000 $ 80,000 $ 152,000 $ 150,000 $ 318,000 $ 60,000 $ 116,000 TOTAL COSTS ALLOCATED TO CLIENTS Profit $ 19,125 $ 47,000 $ 77,750 $ 144,750 $ 58,250 AMOUNT BILLED TO CLIENTPROFIT COSTS ASSIGNED TO COST POOLS e Professional compensation COST $ 4,000,000 Paralegal compensation $ 800,000 Travel $ 100,000 Library and research support $ 90,000 Telephone Office salaries Other office expenses telephone $ $ $ 60,000 28,800 20,000 Photocopying Office salaries Other office expenses Photocopying expenses $ $ $ 60,000 43,200 10,000 General Overhead Rent Heat Taxes Insurance Accounting $ $ $ $ $ 24,000 6,000 18,000 15,000 5,000 ALLOCATION BASES FOR COST POOLS DIRECT COSTS Professional compensation ANNUAL BUDGET ACTIVITY BASES PARNERS' CHARGABLE HOURS Paralegal compenation PARALEGAL CHARGABLE HOURS Travel ACTUAL DOLLARS SPENT Direct expenses Office salaries Library and research support Telephone Office salaries Other office expenses telephone Total telephone Photocopying Office salaries Other office expenses Photocopying expenses Total photocopying ALLOCATED INDIRECT COSTS General Overhead Rent Heat Taxes Insurance Accounting Total general overhead TIME SPENT ON RESEARCH TIME SPENT ON PHONE WITH CLIEN TIME SPENT ON PHOTOCOPYING Square feet associated with activity see below Total expenses ALLOCATED EXPENSES - OFFICE SALARIES AND OVERHEAD For office salaries, the time spent on the 3 cost pools associated with office salaries is as follows Travel 10% Telephone 40% Photocopying 50% For overhead costs, the square feet associated with the 6 cost pools is as follows; Professional staf 1000 Paralegal staf 500 Travel 100 Library and Research Staf Telephone Photocopying 150 100 150 Exhibit 3 Activity Bases and Estimated Activity for the Year CHARGABLE HOURS AL CHARGABLE HOURS ESTIMATED ACTIVITY FOR CURRENT YEAR RATE PER HOUR Billable PROFESSIONAL HOURS #DIV/0! Billable PARALEGAL HOURS #DIV/0! OLLARS SPENT DOLLARS NT ON RESEARCH Billable LIBRARY STAFF HOURS #DIV/0! NT ON PHONE WITH CLIENTS Billable OFFICE STAFF HOURS #DIV/0! NT ON PHOTOCOPYING Billable OFFICE STAFF HOURS #DIV/0! et associated with activity aries is as follows xhibit 5 ACTIVITY-BASED COSTING client DIRECT PROFESSION TIME DATA TO ASSIGN COSTS ASSOCIATED WITH ACTIVITY-BASED COSTING ALLOCATIONS Cost Driver Rate Traditional cost Partners charge rate is per hour Traditional cost Paralegal charge rate is per hour ABC cost Partners charge rate is per hour ABC cost Paralegal charge rate is per hour Paralegal hours by major client A 100 A B 250 B C 400 C D 750 D E 300 E Total for mon 1800 Total for mon Exhibit 5 Activity Based Cost Analysis Milestone 2 DIRECT PARALEGAL TIME Partners Bill rate is Paralegal bill rate is per hour per hour Comparison of Partners hours by major cleint 35 120 90 210 70 525 Client A B C D E is Milestone 2 TOTAL COSTS ALLOCATED TO CLIENTSAMOUNT BILLED TO CLIENTPROFIT 6 Cost Pools $ $ $ $ $ Comparison of Profits Less than 6 cost pools - $ - $ - $ - $ - $ - Variation 0 0 0 0 0 Problem: 2 prepare an activity-based cost analysis associated with clients for the month of January. To accomplish this task, you have identified six cost pools (Exhibit 2 in Excel Sheet) and use the information provided by the law firm (Exhibit 3 ABC Cost Drivers) to review the cost drivers. For each cost pool. You were informed that partners are paid $500 an hour and paralegals are paid $40 per hour. The firm also tracks travel expenses that are directly associated with a client. In addition, library and research costs can be traced directly to each client. The firm's accounting department provided you with an estimate of the activity expected for each of the three cost pools for the year. Cost pool Estimated total hours Library and Research Support Staff Hours General Staff Hours 5,000 Estimated productive (chargeable) hours 3,600 5,000 4,000 The indirect costs will be assigned to the following cost pools. 1. Telephone for making appointments and responding to clients 2. Photocopying Thus, there are six cost pools as shown in Exhibit 3 of this case. The Library and Research Support Cost Pool expenses will be allocated based on library and research staff labor hour, the Telephone and Photocopying Cost Pool expenses will be allocated on the basis of general staff hour General office overhead is allocated to the cost pools of square feet associated with each activity. Office salaries are allocated to Travel, Telephone and Photocopying based on time spent by the office staff. Both office salaries and overhead need to be allocated to the relevant cost pools. ALLOCATED EXPENSES - OFFICE SALARIES AND OVERHEAD For office salaries, the time spent on the 3 cost pools associated with office salaries is as follows Travel 10% Telephone 40% Photocopying 50% For overhead costs, the square feet associated with the 6 cost pools is as follows; Professional staf 1000 Paralegal staf 500 Travel 100 Library and Research Staf 150 Telephone 100 Photocopying 150 Use Excel Tab (exhibit 3 - ABC Cost Driver) to calculate the cost driver rates for the 6 cost pools. You should determine a cost driver rate for each of the cost pools. When determining the cost driver rates consider whether to use the estimated total hours associated with the cost pools or only the productive (chargeable) hours. Develop the costs associated with each client when ABC cost allocation is used. Use Exhibit 4 Traditional vs. ABC to calculate the costs associated with each client using the ABC cost allocation method. Then show the profitability by client using the ABC cost allocation method