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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
Teri Martin Nerdmeister, CPA provides bookkeeping and tax services to her clients. She charges a fee of $60 per hour for bookkeeping and $90 an hour for tax services. Martin estimates the following overhead costs for the upcoming year:
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Office Supplies $16,000
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Computer fees 24,000
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Secretary's salary 30,000
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Rent 18,000
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$88,000
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Operating profits declined last year and Ms. Martin has decided to use activity based coating (ABC) procedures to evaluate her hourly fees. She gathered the following info from last year's records:
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Activity Cost Driver Bookkeeping Tax Services
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Office supplies Hours billed 1,200 800
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Computer fees Computer hrs used 400 600
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Secretary's salary Number of clients 16 84
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Rent Types of services offered 1 1
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What is the toatl overhead allocated to the bookkeeping services using activity based costing?
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A. 24,000
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B. 33,000
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C. 35,000
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(Please show how you came up with the answer, I would like to know how to do this. Thanks)
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