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Curtis & Company is an architectural firm specializing in home remodeling for private clients and new office buildings for corporate clients. Curtis & Company charges customers 125% of their total job cost. Total job cost is equal to 1) professional cost, based on the professional hours actually spent on the client's job, and 2) operating cost, allocated to the client's job. The firm currently uses a "single driver" allocation system, with the number of professional hours spent on client jobs as the cost driver, but its accountant has decided to replace the single driver system with an "activity- based costing" system, starting in 2023. The accountant estimates that its five professional architects will work a total of 8,000 hours on client jobs in 2023. For the new activity-based costing system, the accountant has grouped all of the firm's operating costs into the following three activities, along with estimated cost and activity information: Activity Transportation to clients. Blueprint copying Office support Total operating costs Total Activity Cost $8,000 $36,900 $196,200 $241,100 Cost Driver Round-trip mileage to clients Number of copies Secretarial time Amy Lee is considering hiring Curtis & Company to design her kitchen remodeling in January of 2023. Curtis thinks the job will require 24 hours of professional time. In addition, estimates are that the professionals will have to drive a total of 130 miles back and forth to Lee's house, that three copies of the blueprints will be required, and that 15 hours of secretarial time will be spent lining up subcontractors, suppliers, etc for the job. REQUIRED [Round all allocation rates to two decimal places and allocations to the nearest dollar.] Part A [5 tries; 5 points] What would the estimated operating cost of Amy Lee's remodeling job have been under the current single driver system? Submit Answer Tries 0/5 Total Usage by Clients 13,000 miles 850 copies 2,900 hours Part B [5 tries; 5 points] What will the estimated operating cost of Amy Lee's remodeling job be under the activity-based costing system? Submit Answer Tries 0/5 Curtis & Company is an architectural firm specializing in home remodeling for private clients and new office buildings for corporate clients. Curtis & Company charges customers 125% of their total job cost. Total job cost is equal to 1) professional cost, based on the professional hours actually spent on the client's job, and 2) operating cost, allocated to the client's job. The firm currently uses a "single driver" allocation system, with the number of professional hours spent on client jobs as the cost driver, but its accountant has decided to replace the single driver system with an "activity- based costing" system, starting in 2023. The accountant estimates that its five professional architects will work a total of 8,000 hours on client jobs in 2023. For the new activity-based costing system, the accountant has grouped all of the firm's operating costs into the following three activities, along with estimated cost and activity information: Activity Transportation to clients. Blueprint copying Office support Total operating costs Total Activity Cost $8,000 $36,900 $196,200 $241,100 Cost Driver Round-trip mileage to clients Number of copies Secretarial time Amy Lee is considering hiring Curtis & Company to design her kitchen remodeling in January of 2023. Curtis thinks the job will require 24 hours of professional time. In addition, estimates are that the professionals will have to drive a total of 130 miles back and forth to Lee's house, that three copies of the blueprints will be required, and that 15 hours of secretarial time will be spent lining up subcontractors, suppliers, etc for the job. REQUIRED [Round all allocation rates to two decimal places and allocations to the nearest dollar.] Part A [5 tries; 5 points] What would the estimated operating cost of Amy Lee's remodeling job have been under the current single driver system? Submit Answer Tries 0/5 Total Usage by Clients 13,000 miles 850 copies 2,900 hours Part B [5 tries; 5 points] What will the estimated operating cost of Amy Lee's remodeling job be under the activity-based costing system? Submit Answer Tries 0/5
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Answer rating: 100% (QA)
ANSWER Part A 129600 Part B 147100 CALCULATION Part A 1296 24 125 1 130 060 1 3 4290 1 15 19620 ... View the full answer
Related Book For
Advanced Accounting
ISBN: 978-0538480284
11th edition
Authors: Paul M. Fischer, William J. Tayler, Rita H. Cheng
Posted Date:
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