Salieri Inc. provides housecleaning services to its clients. The company uses anactivity-based costing system for its overhead costs. The company has provided thefollowing data from its activity-based costing system.Activity Cost PoolCleaningJob supportClient supportOther.Total....Total Cost$645,576$129,546$ 20,900$110,000$906,022Total Activity72,700 hours5,400jobs760 clientsNot applicableThe "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs.One particular client, the Rebroff family, requested 31 jobs during the year thatrequired a total of 62 hours of housecleaning. For this service, the client was charged$1,620Required:a. Compute the activity rates (i.e., cost per unit of activity) for the activity costpools. Round off all calculations to the nearest whole cent.b. Using the activity-based costing system, compute the customer margin for theRebroff family. Round off all calculations to the nearest whole cent.c. Assume the company decides instead to use a traditional costing system in whichALL costs are allocated to customers on the basis of cleaning hours. Compute themargin for the Rebroff family. Round off all calculations to the nearest wholecent.

Name: Salieri Inc. provides housecleaning services to its clients. The comp
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Description: Salieri Inc. provides housecleaning services to its clients. The company uses anactivity-based costing system for its overhead costs. The company has provided thefollowing data from its activity-based costing system.Activity Cost PoolCleaningJob sup

Activity-based cost accounting is a costing approach that allocates overhead and other indirect…

Business

Accounting

Required: a. Compute the activity rates (i.e., cost per unit of activity) for the activity cost pools. Round off all calculations to the nearest whole cent. b. Using the activity-based costing system, compute the customer margin for the Rebroff family. Round off all calculations to the nearest whole cent. c. Assume the company decides instead to use a traditional costing system in which ALL costs are allocated to customers on the basis of cleaning hours. Compute the margin for the Rebroff family. Round off all calculations to the nearest whole cent.

Required: a. Compute the activity rates (i.e., cost per unit of activity) for the activity cost pools. Round off all calculations to the nearest whole cent. b. Using the activity-based costing system, compute the customer margin for the Rebroff family. Round off all calculations to the nearest whole cent. c. Assume the company decides instead to use a traditional costing system in which ALL costs are allocated to customers on the basis of cleaning hours. Compute the margin for the Rebroff family. Round off all calculations to the nearest whole cent.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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