Miljohn freelancing provides different services to its clients. The company uses an activity based costing system for its overhead costs. The company has provided the following data from its activity based costing system. Activity Cost Pool Total Cost Total Activity Consulting 368,364 36, 250 hours Bookkeeping 142,500 8,100 jobs Client support 37,620 680 clients Other 220,000 Not applicable The “other” activity cost pool consists of the costs of idle capacity and organization-sustaining costs. One particular client, the Adams corporation, requested 31 jobs during the year that required a total of 24 hours of service. For this service the client as charged 1,750. Required: Compute the increase/decrease in margin assuming Miljohn Freelancing decides to use traditional costing system in which all cost are allocated to customer on the basis of number of jobs.
please help me answer the problem in good accounting form
Miljohn freelancing provides different services to its clients. The company uses an activity based costing system for its
|
Activity Cost Pool |
Total Cost |
Total Activity |
|
Consulting |
368,364 |
36, 250 hours |
|
Bookkeeping |
142,500 |
8,100 jobs |
|
Client support |
37,620 |
680 clients |
|
Other |
220,000 |
Not applicable |
The “other” activity cost pool consists of the costs of idle capacity and organization-sustaining costs. One particular client, the Adams corporation, requested 31 jobs during the year that required a total of 24 hours of service. For this service the client as charged 1,750.
Required:
Compute the increase/decrease in margin assuming Miljohn Freelancing decides to use traditional costing system in which all cost are allocated to customer on the basis of number of jobs.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
