Question

provides housecleaning services to its verhead costs. The company has provided services to its Chients. The company uses has provided the following data The Coletti Cleaning Brigade Company provides housecleani an activity-based costing system for its overhead cos from its activity-based costing system. Total Cost Total Activity Activity Cost Pool $302,993 $43,100 hours Cleaning 79,100 Job Support 5,000 jobs 180 clients 3,348 Client Support 150,000 Other $535,441 Total The "Other activity cost pool consists of the costs of idle capacity and organization-sustaining coste One particular client, the Tubman family, requested 26 jobs during the year that required a total hours of housecleaning. For this service, the client was charged $1,420. Required: 1. Compute activity rates for the activity cost pools 2. Assigning Overhead cost to the particular customer 3. Using the activity-based costing system, compute customer margin for the Tubman family. Round off all calculations to the nearest whole cent.

Answer 1

Answer to Q#2 (First question in the list): 1) Activity Cost Pool Cleaning Job Support Client Support Other Total Total Cost $302,993 $79,100 $3,348 $150,000 $535,441 Total Activity 43,100 hours 5,000 jobs 180 clients Activity Rate $7.03 ($302993 / 43100] $15.82 [$79100 / 5000] $18.60 ($3348 / 180] 2) Costs assigned to a client: Activity Cost Pool Cleaning Job Support Client Support Total Activity Activity Rate Cost Assigned 104 hours $7.03 $731.12 26 jobs $15.82 $411.32 1 client $18.60 $18.60 Total costs assigned to the particular client $1,161.04 3) Total costs assigned to the particular client Price charged to the client Profit margin, dollars $1,161.04 $1,420.00 $258.96 ($1420.00 - $1161.04] Profit margin, percent on cost 18.24% [$258.96 / $1161.04]