Your company uses an activity-based costing system for its overhead costs. The following data is from its activity-based costing system. Activity Rates Cleaning $ 7.58 per hour Job support $20.74 per job Client support $25 per client One particular client requested 25 jobs during the year that required a total of 150 hours. For this service, the client was charged $2,000. What is customer margin for this client? (Round to the nearest dollar.) $ 345 $1,681 $1,656 $ 320

Your company uses an activity-based costing system for its overhead costs. The following data is from its activity-based costing system. Activity Rates Cleaning $ 7.58 per hour Job support $20.74 per job Client support $25 per client One particular client requested 25 jobs during the year that required a total of 150 hours. For this service, the client was charged $2,000. What is customer margin for this client? (Round to the nearest dollar.) $ 345 $1,681 $1,656 $ 320

Name: Your company uses an activity-based costing system for its overhead c
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Description: Your company uses an activity-based costing system for its overhead costs. Thefollowing data is from its activity-based costing system.Activity RatesCleaning$ 7.58 per hourJob support$20.74 per jobClient support$25 per clientOne particular client re

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter18: Pricing And Profitability Analysis

Section: Chapter Questions

Problem 1CE: Ventana Window and Wall Treatments Company provides draperies, shades, and various window...

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Identifying Fixed, Variable, Mixed, and Step Costs Consider each of the following independent situations: a. A computer service agreement in which a company pays 150 per month and 15 per hour of technical time b. Fuel cost of the companys fleet of motor vehicles c. The cost of beer for a bar d. The cost of computer printers and copiers at your college e. Rent for a dental office f. The salary of a receptionist in a law firm g. The wages of counter help in a fast-food restaurant h. The salaries of dental hygienists in a three-dentist office. One hygienist can take care of 120 cleanings per month. i. Electricity cost which includes a 15 per month billing charge and an additional amount depending on the number of kilowatt-hours used Required: 1. For each situation, describe the cost as one of the following: fixed cost, variable cost, mixed cost, or step cost. (Hint: First, consider what the driver or output measure is. If additional assumptions are necessary to support your cost type decision, be sure to write them down.) Example: Raw materials used in productionVariable cost 2. CONCEPTUAL CONNECTION Change your assumption(s) for each situation so that the cost type changes to a different cost type. List the new cost type and the changed assumption(s) that gave rise to it. Example: Raw materials used in production. Changed assumptionthe materials are difficult to obtain, and a years worth must be contracted for in advance. Now, this is a fixed cost. (This is the case with diamond sales by DeBeers Inc. to its sightholders. See the following website for information: www.keyguide.net/sightholders/.)
Haywood Printing is processing a job with the following activity rates: Activity Cost Driver Driver Rate Direct labor Number of hours $8 Copying Number of copies $0.05 If this job requires 5 hours for 1,000 copies, what is the activity-based cost of the job?
The managing director of a consulting group has the accompanying monthly data on total overhead costs and professional labor hours to bill to clients. Complete parts a through c. Click the icon to view the monthly data. a. Develop a simple linear regression model between billable hours and overhead costs. Overhead Costs = +xBillable Hours X Monthly Overhead Costs and Billable Hours Data (Round the constant to one decimal place as needed. Round the coefficient to four decimal places as needed. Do not include the $ symbol in your answers.) Overhead Costs Billable Hours 0 $315,000 3,000 $365,000 4,000 $395,000 5,000 $447,000 6,000 $530,000 7,000 $550,000 8,000
The managing director of a consulting group has the accompanying monthly data on total overhead costs and professional labor hours to bill to clients. Complete parts a through c. Click the icon to view the monthly data. a. Develop a simple linear regression model between billable hours and overhead costs. Overhead Costs +(9) x Billable Hours (Round the constant to one decimal place as needed. Round the coefficient to four decimal places as needed. Do not include the $ symbol in your answers.) X Monthly Overhead Costs and Billable Hours Data Overhead Costs Billable Hours $315,000 3,000 $360,000 4,000 $385,000 5,000 $438,000 6,000 $520,000 7,000 $540,000 8,000 D Print Done
Your company uses an activity-based costing system for its overhead costs. Thefollowing data is from its activity-based costing system. Activity Cost Pools Activity Rate Construction ........... $35.50 Per DLH Office support....... $580.00 Per Order Customer Support........ $250.00 Per Customer Revenue related to job $35,000.00 Number of orders 5 Traceable costs........ $7,500 DLH used 635 What is customer margin for this client? (Round to the nearest dollar if necessary.) Group of answer choices $25,693 $1,808 $9,308 $2,058
Assume a company's activity-based costing system includes three activities with the following activity rates: Activity Cost Pool Activity Rate $ 2 per mile driven $ 50 per delivery $ 22 per phone call Travel Deliveries Customer service Two of the company's many customers include Customer A and Customer B. These two customers consumed the company's activities as follows: Total Expected Activity Customer A Customer B Travel (number of miles driven) Deliveries (number of deliveries) Customer service (number of phone calls) 300 250 15 5 20 12 If the company earned $1,230 in revenue serving Customer B, then what is the customer margin for this customer? Multiple Cholce $236 $216 $196
ROXY Tires the manufacturer and exported company of tires. The company uses an activity based costing system for its overhead costs. The company has provided the following data concerning its activity-based costing system. Activity Cost pool Activity Measure Annual Activity Supporting Direct Labor Direct labor Hour $28 per DLH Order Processing Order $285 per Order Custom design processing Custom design $185 per customer design Customer service customer $378 per customer Management would like an analysis of the profitability of a particular customer, Roxy Tires, which has ordered the following products over the last 12 months: Items…………………………….standard model……………….customer Design Number of Tires…………………20………………………………5 Number of orders……………….1……………………………….5 Number of customer designs……0………………………………5 Direct labor hour per Tires 26.5…………………………….28 Selling price per…
Assume a company's activity-based costing system Includes three activitles with the following activity rates: Activity Cost Pool Activity Rate $ 2 per mile driven $ 50 per delivery $ 22 per phone call Travel Deliveries Customer service Two of the company's many customers Include Customer A and Customer B. These two customers consumed the company's activitles as follows: Total Expected Activity Customer A Customer B Travel (number of miles driven) 300 250 Deliveries (number of deliveries) Customer service (number of phone calls) 15 5 20 12 How much total activity cost would be assigned to Customer A from the company's three activitles? Multiple Choice $1,680 $1,980 $1,790 $1,690
The graphs below represent cost behavior patterns that might occur in a company’s cost structure. The vertical axis represents total cost, and the horizontal axis represents activity output Required:For each of the following situations, choose the graph from the group a–1 that best illustrates the cost pattern involved. Also, for each situation, identify the driver that measures activity output.1. The cost of power when a fixed fee of $500 per month is charged plus an additional charge of $0.12 per kilowatt-hour used.2. Commissions paid to sales representatives. Commissions are paid at the rate of 5 percent of sales made up to total annual sales of $500,000, and 7 percent of sales above $500,000.3. A part purchased from an outside supplier costs $12 per part for the first 3,000 parts and $10 per part for all parts purchased in excess of 3,000 units.4. The cost of surgical gloves, which are purchased in increments of 100 units (gloves come in boxes of 100 pairs).5. The cost of tuition…
The managerial accountant at Sunny Manufacturing needs to determine how many costs are fixed costs and how many costs are variable costs in the organization. The managerial accountant reported the following information: Use the high-low method to determine the cost equation and use machine hours as the base for a cost driver in the analysis. For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). Month Machine-Hours Total Cost January 1,800 $21,500 February 2,900 $23,200 March 1,000 $19,750 April 2,400 $21,000 May 3,400 $23,900
Identifying Fixed, Variable, Mixed, and Step CostsConsider each of the following independent situations:a. A computer service agreement in which a company pays $150 per month and $15 per hourof technical timeb. Fuel cost of the company’s fleet of motor vehiclesc. The cost of beer for a bard. The cost of computer printers and copiers at your collegee. Rent for a dental officef. The salary of a receptionist in a law firmg. The wages of counter help in a fast-food restauranth. The salaries of dental hygienists in a three-dentist office. One hygienist can take care of 120cleanings per month.i. Electricity cost which includes a $15 per month billing charge and an additional amountdepending on the number of kilowatt-hours usedRequired:1. For each situation, describe the cost as one of the following: fixed cost, variable cost,mixed cost, or step cost. (Hint: First, consider what the driver or output measure is. Ifadditional assumptions are necessary to support your cost type decision, be sure…
Elite Consulting Ltd offers a range of immigration consulting services. The company’s service costingsystem estimates the cost of each consulting job by accumulating costs of the professional labour thatworks on the job plus a charge for overhead.The cost of professional labour is charged to jobs using the following three rates:Cost per hour Charge out rate for billing system Visa application $300 per hour $630 per hourVisa extension $75 per hour $350 per hourAAT appeal $225 per hour $1000 per hour The predetermined overhead rate is based on professional labour costs, which are budgeted to be$663600 for the current year. The estimated overhead costs for the current year are budgeted to be:Management salaries $850,000Salaries of administration staff $285,000Depreciation on IT hardware and software $240,000Office supplies $2,250Telecommunications $3,150Insurance $150,000Depreciation on office fixtures and fittings $11,250Rent $100,000Electricity $45,000Council rates $23,300 During June…