The accounting department of a large limousine company is analyzing the costs of its services. The cost data and level of activity for the past 16 months follow. Accounting Analyses Accounts Processed Service Costs $ 59, 100 59, 200 60, 700 58, 300 59,900 62,000 58,100 62,000 58,400 58, 200 59,300 60, 700 62,000 59,000 58,800 61, 200 Special Customer Paychecks Month 1,220 1,270 1,270 1,160 1,100 1,030 1,180 2 220 2 3 180 3 2 160 4 200 310 150 250 5 6 4 3 8 2 170 1,180 230 1,070 1,190 1,160 1,190 880 10 280 190 11 12 2. 210 280 270 300 13 1,070 980 14 15 2 16 230 1,020 Totals 34 3,630 17,970 $956,900 In addition to the above information, you learn that the accounting department had the following total costs for the past 16 months for each of the following. Total cost of paychecks processed Total cost of maintaining customer accounts Total cost of performing special analyses Total fixed costs (total for 16 months) $208,452 110,715 136,000 501,733 Total costs $956,900 Required: a-1. What is the cost per unit for paychecks processed? a-2. What is the cost per unit for customer accounts maintained? a-3. What is the cost per unit for special analyses performed? b. Assuming the following level of cost-driver volumes for a month, what are the accounting department's estimated costs of doing business using the account analysis approach? • 910 paychecks processed. • 190 customer accounts maintained. · 2 special analyses.
The accounting department of a large limousine company is analyzing the costs of its services. The cost data and level of activity for the past 16 months follow. Accounting Analyses Accounts Processed Service Costs $ 59, 100 59, 200 60, 700 58, 300 59,900 62,000 58,100 62,000 58,400 58, 200 59,300 60, 700 62,000 59,000 58,800 61, 200 Special Customer Paychecks Month 1,220 1,270 1,270 1,160 1,100 1,030 1,180 2 220 2 3 180 3 2 160 4 200 310 150 250 5 6 4 3 8 2 170 1,180 230 1,070 1,190 1,160 1,190 880 10 280 190 11 12 2. 210 280 270 300 13 1,070 980 14 15 2 16 230 1,020 Totals 34 3,630 17,970 $956,900 In addition to the above information, you learn that the accounting department had the following total costs for the past 16 months for each of the following. Total cost of paychecks processed Total cost of maintaining customer accounts Total cost of performing special analyses Total fixed costs (total for 16 months) $208,452 110,715 136,000 501,733 Total costs $956,900 Required: a-1. What is the cost per unit for paychecks processed? a-2. What is the cost per unit for customer accounts maintained? a-3. What is the cost per unit for special analyses performed? b. Assuming the following level of cost-driver volumes for a month, what are the accounting department's estimated costs of doing business using the account analysis approach? • 910 paychecks processed. • 190 customer accounts maintained. · 2 special analyses.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The accounting department of a large limousine company is analyzing the costs of its services.
Need assistance with a1-a3
Transcribed Image Text:The accounting department of a large limousine company is analyzing the costs of its services. The cost data and level of activity for
the past 16 months follow.
Customer Paychecks
Special
Analyses Accounts
Accounting
Processed Service Costs
$ 59,100
Month
1
2
220
1,220
1,270
1,270
1,160
1,100
1,030
1,180
1,180
1,070
1,190
1,160
1,190
2
3
180
59, 200
60, 700
58, 300
59,900
62,000
58, 100
3
2
160
4
3
200
5
3
310
6.
4
150
7
3
250
8
2
170
62,000
9
230
58,400
58, 200
59, 300
60, 700
62, 000
10
1
280
11
3
190
12
2
210
13
3
280
880
14
270
1,070
59,000
58, 800
61, 200
15
2
300
980
16
1
230
1,020
Totals
34
3,630
17,970
$956,900
In addition to the above information, you learn that the accounting department had the following total costs for the past 16 months for
each of the following.
Total cost of paychecks processed
Total cost of maintaining customer accounts
Total cost of performing special analyses
Total fixed costs (total for 16 months)
$208,452
110,715
136, 000
501,733
Total costs
$956,900
Required:
a-1. What is the cost per unit for paychecks processed?
a-2. What is the cost per unit for customer accounts maintained?
a-3. What is the cost per unit for special analyses performed?
b. Assuming the following level of cost-driver volumes for a month, what are the accounting department's estimated costs of doing
business using the account analysis approach?
• 910 paychecks processed.
• 190 customer accounts maintained.
· 2 special analyses.
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