Curtis & Company is an architectural firm specializing inhome remodeling for private clients and new office buildings forcorporate clients.
Curtis & Company charges customers at a billing rate equalto 135% of the clients total job cost. A client’s total job cost isa combination of 1) professional time spent on the client, and 2)operating costs allocated to the client’s job. Curtis currentlyallocates operating costs to jobs based on the number ofprofessional hours spent on the job.
Curtis estimates its five professionals will work a total of9,000 hours on client jobs during the year, and their salaries willtotal $900,000. All operating costs other than professionalsalaries (travel reimbursements, copy costs, secretarial salaries,office lease, etc.) can be grouped into three activities. Relevantinformation for these activities are estimated as follows:
Activity
Total Activity Cost
Cost Driver
Total Usage by CorporateClients
Total Usage by PrivateClients
Transportation to clients
$9,400
round trip mileage toclients
2,500 miles
13,800 miles
blueprint copying
30,700
number of copies
240 copies
1,000 copies
office support
197,800
secretarial time
2,500 hours
3,000 hours
total operatingcost
$237,900
Amy Lee hired Curtis & Company to design her kitchenremodeling. A total of 22 professional hours were spent on thisjob. In addition, Amy’s remodeling job required one of theprofessionals to travel back and forth to her house for a total of150 miles. The blueprints had to be copied four times because Amychanged the plans several times. In addition, 15 hours ofsecretarial time were used lining up the subcontractors for thejob.
-REQUIRED [ROUND ALL ALLOCATION RATES TO THE NEARESTCENT AND ALLOCATIONS TO THE NEAREST DOLLAR.]
-Part AWhat is the total cost of Amy Lee’s remodeling job under thecurrent system?
-Part BWhat would be the total cost of Amy Lee’s remodeling job under anactivity-based costing system?
“Looking for a Similar Assignment? Get Expert Help at an Amazing Discount!”
What Students Are Saying About Us
.......... Customer ID: 12*** | Rating: ⭐⭐⭐⭐⭐"Honestly, I was afraid to send my paper to you, but splendidwritings.com proved they are a trustworthy service. My essay was done in less than a day, and I received a brilliant piece. I didn’t even believe it was my essay at first 🙂 Great job, thank you!"
.......... Customer ID: 14***| Rating: ⭐⭐⭐⭐⭐
"The company has some nice prices and good content. I ordered a term paper here and got a very good one. I'll keep ordering from this website."
