Curtis Company is an architectural firm specializing in hom

Curtis & Company is an architectural firm specializing in home remodeling for private clients and new office buildings for corporate clients. Curtis & Company charges customers at a billing rate equal to 125% of the client\'s total job cost. A client\'s total job cost is a combination of 1) professional cost based on the professional hours spent on the client\'s job, and 2) operating costs allocated to the client\'s job. Curtis currently allocates operating costs to jobs based on the number of professional hours spent on the job. Curtis estimates its five professionals will work a total of 12,000 hours on client jobs during the year, and their salaries will total $1,320,000. All operating costs other than professional salaries (travel reimbursements, copy costs, secretarial salaries, office lease, etc.) can be grouped into three activities. Relevant information for these activities are estimated as follows: Activity Transportation to clients Total Usage by Private Clients 14,000 miles Cost Driver Round-trip mileage to clients Number of copies Total Activity Cost $10,600 31,400 198,400 $240,400 Total Usage by Corporate Clients 3,200 miles 240 copies 2,500 hours Blueprint copying 950 copies 2,900 hours Secretarial time ofice support Total operating costs Amy Lee hired Curtis & Company to design her kitchen remodeling. A total of 23 professional hours were spent on this job. In addition, Amy\'s remodeling job required one of the professionals to travel back and forth to her house for a total of 130 miles. The blueprints had to be copied four times because Amy changed the plans several times. In addition, 15 hours of secretarial time were used lining up the subcontractors for the job. REQUIRED (ROUND ALL ALLOCATION RATES TO THE NEAREST CENT AND ALLOCATIONS TO THE NEAREST DOLLAR.] Part A (5 tries; 5 points] What is the total cost of Amy Lee\'s remodeling job under the current single-driver system? Submit Answer Tries 0/6 Part B (5 tries; 5 points) what would be the total cost of Amy Lee\'s remodeling job under an activity-based costing system? | Submit Answer Tries 0/6

Solution

Under single driver system

Professional costs=$1320000*23hrs/12000 hrs= $2530

Operating Costs=$240400*23/12000=$460.76

Total costs= $2990.76

Under Activity based costing system

Professional costs=$2530

Transportation=$10600*130/17200

=$80.12

Blueprint=$31400*4/1190=$105.55

Secretary time=$198400*15/5400

=$551.11

Total costs=$3266.78

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