I'm having trouble determining the profitability of the firm's information systems services and e-commerce consulting activities in problem 3. Could you help me solve this problem? I'm confused by the activity-based costing system and need to find the total billings, income, and profitability percentage.
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I'm having trouble determining the profitability of the firm's information systems services and e-commerce consulting activities in problem 3. Could you help me solve this problem? I'm confused by the activity-based costing system and need to find the total billings, income, and profitability percentage.
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- 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 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.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.help me
- Objective: Consider that you are an analyst at Regeneron Pharmaceuticals. You need to decide how to allocate administrative overhead costs to Regeneron's main commercial products (Eylea, Dupixent, Kevzara and Praluent). Determine how to appropriately allocate the costs in the table below to each of the commercial products using an allocation methodology of your choice. Department2019 Annual Operating ExpenseTime spent supporting Commercial productsCommercial$200MM100%IT$100MM25%Facilities$150MM0%Finance$25MM20%Human Resources$75MM10% Use the supporting document Net Product Sales of REGN Products to facilitate your analysis. Provide a written summary of how you allocated the overhead costs to each product in an outline of no more than one page. As a starting point, it's recommended that you revisit the material we covered in Chapter 12. Guidance on calculations:Start off with Net Product Sales of REGN Products. Your objective pertains to 2019 expenses, so you should be reviewing 2019…Assume a service company has implemented an activity-based costing system with five activities as shown below: Activity Cost Pool (Activity Measure) Customer deliveries (Number of deliveries) Manual order processing (Number of manual orders) Electronic order processing (Number of electronic orders) Line item picking (Number of line items picked) Other organization-sustaining costs (None) Total Cost Total Activity $ 400,000 $ 280,000 $ 150,000 $ 450,000 $ 300,000 8,000 deliveries 5,000 manual orders 15,000 electronic orders 375,000 line items The company serves numerous customers, two of which include Hospital A and Hospital B. The activity demands pertaining to these two customers are as follows: Activity Hospital A Hospital B Activity Measure Number of deliveries Number of manual orders Number of electronic orders Number of line items picked 8. 25 30 15 0. 115 250 How much total activity cost should be assigned to Hospital A for internal management purposes? Multiple Choice $785 <…k ces Marvin's Kitchen Supply delivers restaurant supplies throughout the city. The firm adds 10 percent to the cost of the supplies to cover the delivery cost. The delivery fee is meant to cover the cost of delivery. A consultant has analyzed the delivery service using activity- based costing methods and identified four activities. Data on these activities follow. Data on these Activity Processing order Loading truck Delivering merchandise Processing invoice Total overhead Cost Driver Number of orders. Number of items. Number of orders Number of invoices Order value Number of orders. Number of items Number of invoices Cost Driver Volume 52 600 12 Cost $75,000 150,000 90,000 72,000 $387,000 Driver Volume 5,000 orders 100,000 items Two of Marvin's customers are City Diner and Le Chien Chaud. Data for orders and deliveries to these two customers follow. City Diner Le Chien Chaud $75,000 $99, 900 110 1,500 150 5,000 orders 4,000 invoices Required: a. What would the delivery charge for…
- ROXY Tires the manufacturer and exported company of tires. The company uses an activity based costing system for its overhead costs. The company has provided the following data concerning its activity-based costing system. Activity Cost pool Activity Measure Annual Activity Supporting Direct Labor Direct labor Hour $28 per DLH Order Processing Order $285 per Order Custom design processing Custom design $185 per customer design Customer service customer $378 per customer Management would like an analysis of the profitability of a particular customer, Roxy Tires, which has ordered the following products over the last 12 months: Items…………………………….standard model……………….customer Design Number of Tires…………………20………………………………5 Number of orders……………….1……………………………….5 Number of customer designs……0………………………………5 Direct labor hour per Tires 26.5…………………………….28 Selling price per…Required information Skip to question [The following information applies to the questions displayed below.] Zenon Computer competes at the retail level on the basis of customer service. It has invested significant resources in its customer service department. Recently, the company has installed a traditional activity-based costing (ABC) system to provide better cost information for pricing, decision making, and customer profitability analysis. Most of the costs of running the customer service department are considered committed (i.e., short-term fixed) costs (principally, personnel and equipment costs). The budgeted cost for the upcoming period is $832,000. Activity analysis, recently conducted when the ABC system was implemented, revealed the following information: Activities Percentage of Employee Time Estimated (Budgeted) Cost Driver Quantity Handling customer orders 75% 8,320 customer orders Processing customer complaints 10 416 customer complaints Conducting customer credit checks…5-26 Activity-based costing, manufacturing. Decorative Doors, Inc., produces two types of doors, interior and exterior. The company’s simple costing system has two direct-cost categories (materials and labor)and one indirect-cost pool. The simple costing system allocates indirect costs on the basis of machinehours. Recently, the owners of Decorative Doors have been concerned about a decline in the market sharefor their interior doors, usually their biggest seller. Information related to Decorative Doors production forthe most recent year follows:Interior ExteriorUnits sold 3,200 1,800Selling price $ 125 $ 200Direct material cost per unit $ 30 $ 45Direct manufacturing labor cost per hour $ 16 $ 16Direct manufacturing labor-hours per unit 1.50 2.25Production runs 40 85Material moves 72 168Machine setups 45 155Machine-hours 5,500 4,500Number of inspections 250 150The owners have heard of other companies in the industry that are now using an activity-based costingsystem and are curious how…
- 1 Kramerica, Incorporated currently uses traditional costing procedures. They apply $800,000 of overhead to products Beta and Zeta on the basis of direct labor hours. The company is considering a shift to activity-based costing and the creation of individual cost pools that will use direct labor hours (DLH). production setups (SU), and number of parts components (PC) as cost drivers. Data on the cost pools and respective driver volumes follow. Pool Number Pool Number 1 (Driver: 2 (Driver: DLH) SU) 1,200 2,800 Product Beta Zeta Pool Cost $ 160,000 45 55 PC) 2,250 750 $ 280,000 $360,000 The overhead cost allocated to Beta by using traditional costing procedures would be: Multiple Choice $240.000 $356,000 Pool Number 3 (Driver: $444,000Problem 5 (Linear Cost Approximation) Tita Lopez, managing director of the ABS Consulting Group, is examining how overhead costs behave with variations in monthly professional labor- hours billed to clients. Assume the following historical data: Professional Labor-Hours Billed to Clients Total Overhead Costs P340,000 400.000 435,000 477,000 529.000 587.000 3,000 4,000 5,000 6.000 7,000 8.000 Required: 1. Compute the linear cost function, relating total overhead cost to professional labor-hours, using the representative observations of 4,000 and 7,000 hours. component of the cost function represent the fixed overhead costs of the ABS Consulting Group? Why? Plot the linear cost function. Does the constant What wouid be the predicted total overhead costs for (a) 5,000 hours, and (b) 8.000 hours using the cost function estimated in requirement 1? Plot the predicted costs and actual costs for 5,000 and 8,000 hours. 3. Lopez had a chance to accept a special job that would have boosted…Activity-based costing in an insurance company Umbrella Insurance Company carries three major lines of insurance: auto, workers' compensation, and homeowners. The company has prepared the following report for 20Y2: Management is concerned that the administrative expenses may make some of the insurance lines unprofitable. However, the administrative expenses have not been allocated to the insurance lines. The controller has suggested that the administrative expenses could be assigned to the insurance lines using activity-based costing. The administrative expenses are comprised of five activities. The activities and their rates are as follows: Activity-base usage data for each line of insurance were retrieved from the corporate records and are shown below. a.Complete the product profitability report through the administrative activities. b.Determine the underwriting income as a percent of premium revenue. C.Determine the Operating income as a percent of premium revenue, rounded to one decimal place. d.Interpret the report.