Question

PT 1 & 2

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 Project management department Supervision Billings Collections 1,400 contact hours 2,000 design hours 53,000 square feet $ 224,000 107,000 34,450 1,000 days 9 jobs 9 jobs $160,000 9,200 14,470 Required: 1. & 2. Using ABC, compute the firm's activity overhead rates. Form activity cost pools where appropriate. Assign costs to a 8,200- square-foot job that requires 450 contact hours, 356 design hours, and 135 days to complete. (Round activity rate answers to 2 decimal places.) Activity Expected Costs Expected Activity Driver Activity Rate Activity Driver Incurred Overhead Assigned Client consultation 1 Contact hours 0 Drawings Modeling Supervision Billings/Collection 0 0 Total overhead cost

Answer 1

Activity Expected costs Expected activity driver a $ $ Client consultation Drawings Modelling Supervision Billings/Collection Activity driver Overhead Activity rate incurred assigned c= a + b d cxd S 160.00 per contact hour 450 $ 72,000 $ 53.50 per design hour 356 S 19,046 $ 0.65 per square feet 8200 $ 5,330 $ 160.00 per day 135 $ 21,600 $ 2,630.00 per job 1 $ 2,630 Total costs $ 120,606 b 224,000 1,400 contact hours 107,000 2,000 design hours 34,450 53,000 square feet 160,000 1,000 days 23,670 9 jobs 549,120 $ $ $ $

Billings and collection have a common activity driver, i.e. number of jobs. Therefore, they are aggregated: ($9200 + $14470)

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Activity Overhead cost Activity drivers Orthopedic surgery Activity Overhead driver assigned incurred e схе b Professional salaries $ 2,128,000 11,200 Professional hours Patient services and supplies $ 36,720 720 Number of patients Building cost $ 210,600 1,620 Square feet $ 2,375,320 General surgery Activity Activity rate Overhead driver assigned incurred c= a + b d cxd $ 190.00 per professional hour 3100 $ 589,000 $ 51.00 per patient 460 $ 23,460 $ 130.00 per square feet 660 $ 85,800 Total costs (i) $ 698,260 Number of patients (ii) 460 Average cost per patient (i - ii) $ 1,518 8100 $ 1,539,000 260 $ 13,260 960 $ 124,800 $ 1,677,060 260 $ 6,450