Question

1 Ch13-17 Saved Help Save Exit Maya and Karma is an architectural firm that provides services for residential construction projects. The following data including activities and associated cost pools pertain to a recent reporting period. Activities Costs Design department client consultation Drawings Modeling Project management department Supervision Billings Collections 1,600 contact hours 2,600 design hours 44,000 square feet $176,000 148,200 33,000 900 days 5 jobs 5 jobs $153,000 8,900 4,700 Required: 1. & 2. Using ABC, compute the firm's activity overhead rates. Form activity cost pools where appropriate. Assign costs to a 7,400- square-footjob that requires 550 contact hours, 346 design hours, and 180 days to complete. (Round activity rate answers to 2 decimal places.) Activity Driver Incurred Activity Expected Activity Driver Overhead Assigned Expected Costs Activity Rate 0 Client consultation Drawings Modeling Supervision Billings/Collection 0 0 Total overhead cost Next > 35 of 36 !!! < Prev

Answer 1

Solution:

1&2.)

Activity	Expected Costs (a)	Expected (b)	Activity driver	Activity Rate (c = a÷ b)		Activity driver incurred (d)	Overhead assigned ( e = c × d)
Client consultation	$176,000	1,600	contact hours	$110	per contact hour	550 contact hours	$60,500($110 × 550 contact hours)
Drawings	$148,200	2,600	design hours	$57	per design hour	346 design hours	$19,722 ($57 × 346 design hours)
Modeling	$33,000	44,000	square feet	$0.75	per square feet	7,400 square foot	$5,550 ($0.75 × 7,400 square foot )
Supervision	$153,000	900	days	$170	per day	180 days	$30,600 ($170 × 180 days)
Billing / Collections	$13,600 ($8,900 + $4,700)	5	jobs	$2,720	per job	1	$2,720 ($2,720 × 1)
						Total overhead costs	$119,092

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