Lisa is a contractor, and she owns a small home renovation company that specializes in kitchen renovations. Lisa fears she has been underbidding her projects, and that translates into lost profits that could help sustain her through slow periods. She is putting together an estimate for a potential client and has determined the following activities: Activity Demo of Existing Space Cabinet Installation Countertop Installation Final bid price Cost Driver $ Square Footage # of Hours Square Footage Rate $3.26 /square foot $205 /hour $12.00 /square foot Estimated Use for Job 520 square feet 8 hours Previously, Lisa was billing at a flat rate of $16 per square foot of the demo space with no additional markup. Lisa would like to add a 20% markup to the cost to arrive at the final bid price. Using Activity-Based Costing (ABC), what is the final bid price for her potential customer? (Round intermediate calculations and final answ to 2 decimal places, e.g. 25,000.25.) 280 square feet

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Lisa is a contractor, and she owns a small home renovation company that specializes in kitchen renovations. Lisa fears she has been
underbidding her projects, and that translates into lost profits that could help sustain her through slow periods. She is putting together
an estimate for a potential client and has determined the following activities:
Activity
Demo of Existing Space
Cabinet Installation
Countertop Installation
Final bid price
Cost Driver
$
Square Footage
# of Hours
Square Footage
Rate
$3.26 /square foot
$205 /hour
$12.00 /square foot
Estimated Use for Job
520 square feet
8 hours
Previously, Lisa was billing at a flat rate of $16 per square foot of the demo space with no additional markup. Lisa would like to add a
20% markup to the cost to arrive at the final bid price. Using Activity-Based Costing (ABC), what is the final bid price for her potential
customer? (Round intermediate calculations and final answ to 2 decimal places, e.g. 25,000.25.)
280 square feet
Transcribed Image Text:Lisa is a contractor, and she owns a small home renovation company that specializes in kitchen renovations. Lisa fears she has been underbidding her projects, and that translates into lost profits that could help sustain her through slow periods. She is putting together an estimate for a potential client and has determined the following activities: Activity Demo of Existing Space Cabinet Installation Countertop Installation Final bid price Cost Driver $ Square Footage # of Hours Square Footage Rate $3.26 /square foot $205 /hour $12.00 /square foot Estimated Use for Job 520 square feet 8 hours Previously, Lisa was billing at a flat rate of $16 per square foot of the demo space with no additional markup. Lisa would like to add a 20% markup to the cost to arrive at the final bid price. Using Activity-Based Costing (ABC), what is the final bid price for her potential customer? (Round intermediate calculations and final answ to 2 decimal places, e.g. 25,000.25.) 280 square feet
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