The Coletti Cleaning Brigade Company provides housecleaning services to its clie
ID: 2384896 • Letter: T
Question
The Coletti Cleaning Brigade Company provides housecleaning 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
Cleaning $ 299,976 43,100 hours
Job support 75,722 4,820 jobs
Client support 3,063 166 clients
Other 147,000 Not applicable
________________________________________ ________________________________________
Total $ 525,761
The “Other” activity cost pool consists of the costs of idle capacity and organization-sustaining costs.
One particular client, the Tubman family, requested 21 jobs during the year that required a total of 84 hours of housecleaning. For this service, the client was charged $1,490.
Required:
a. Using the activity-based costing system, compute the customer margin for the Tubman family. (Round your answer to 2 decimal places. Omit the "$" sign in your response.)
Customer margin $
b. 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 Tubman family. (Round your intermediate and final answer to 2 decimal places. Omit the "$" sign in your response.)
Customer margin $
Explanation / Answer
A) Cleaning $ 299,976/ 43,100 hours= 6.96 Job 75,722 /4,820 jobs= 15.71 Client 3,063 /166 clients= 18.45 he client was charged $1,490. Cleaning 84 hours x 6.96= (584.64) Job 21 x 15.71= (329.91) Client support 1 (18.45) ----------- Customer Margin $557 B) total 525,761/ 43,100 hours= $12.20 per hour Cleaning 84 hours x 12.20 per hour = $ 1,024.80 $1,490 - $ 1,024.80= $465.20 here you go just learn it myself