Question

Chapter 17-1

Cardiff and Delp is an architectural firm that provides services for residential construction projects. The following data pertain to a recent reporting period.

Activities Costs Design department Client consultation Drawings Modeling 1,800 contact hours 2,400 design hours $216,000 136, 800 27,300 42,000 square feet Project management department Supervision Billings Collections 600 day:s 5 jobs 5 jobs $120,00e 8,400 4, 200
Required:
1. & 2. Using ABC, compute the firm's activity overhead rates. Form activity cost pools where appropriate. Assign costs to a 7,200 square foot job that requires 540 contact hours, 354 design hours, and 200 days to complete. (Round activity rate answers to 2 decimal places.)

Answer 1

Answer 1) Computation of Firm's Activity Overhead rates Activity Expected Cost Expected Activity driver Activity rate $216,000 Client Consultation Drawings Modelini Supervision Billings/ Collections $120 Per Contact Hour $57 Per Design Hour $0.65 Per Square feet 1,800 Contact Hours 2,400 Design Hours $27,300 $120,000 $12,600 42,000 Square feet 5ljobs $2520 Per job

2)Assignment of given Costs Activity Activity rate Activity incurred 540 354 7,200 冰K) 1 Overhead Assigned $64,800 $4,680 Client Consultation Drawing:s Modeling $120 Per Contact Hour $57 Per Design Hour $0.65 Per Square feet $200 Per day upervision $40,000 Billings / Collections $2520 Per job Total $132,178