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bogdanovich [222]
2 years ago
14

Carlin and Marley, an accounting firm, provides consulting and tax planningservices. For many years, the firm's total administra

tive cost (currently$270,000) has been allocated to services on this basis of billable hours toclients. A recent analysis found that 55% of the firm's billable hours to clientsresulted from tax planning services, while 45% resulted from consultingservices.The firm, contemplating a change to activity-based costing, has identifiedthree components of administrative cost, as follows:
Staff Support $200,000
In-house computingcharges 50,000
Miscellaneous officecosts 20,000
Total $270,000
A recent analysis of staff support found a strong correlation with the numberof clients served. In contrast, in-house computing and miscellaneous officecost varied directly with the number of computer hours logged and number ofclient transactions, respectively. Consulting clients served totaled 35% of thetotal client base, consumed 30% of the firm's computer hours, and accountedfor 20% of the total client transactions.

Business
1 answer:
lara31 [8.8K]2 years ago
8 0

Answer:

The amount of administrative cost chargeable to tax planning services would decrease by $32,500

Note: Kindly find an attached copy of the complete question below

Explanation:

Solution

Given that:

In this example, the total cost of administrative charged to tax planning services is given as =$270,000 * 55%

=$148,000

Now,

The activity based cost system is shown below:

Cost                 Amount           Cost driver          Consulting     Tax planning

Staff support  200,000      No of clients served     35%              65%

In house com-  

puting charges 50,000     Computers hrs logged   30%             70%

Misc office

Cost                   20,000         No of clients

                                               Transaction                  20%              80%

Total                  $270,000

Thus,

Activity                    Workings         Allocated to tax planning services

Staff support        200,000 * 65%             130,000

In house Comp-

uting Charges        50,000 * 70%              35,000

Misc office costs    20,000 * 80%              16,000

The total cost

allocated                                                       $181,000

So, the change in amount allocated to tax planning services under this system is = $181,000-$148,500

= $32,500

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Answer:

C. Job specialization

Explanation:

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Job specialization is as a result of division of labor. Division of labor is the sharing of roles or functions among employees in a firm so as to Improve productivity.

When a particular role is assigned to an employee for a long period of time, the employee becomes an expert as a result of that.

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3 years ago
These expenditures were incurred by Carla Vista Co. in purchasing land: cash price $61,440, accrued taxes $4,720, attorney’s fee
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Answer:

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Cost of land = cash price + accrued taxes + attorney's fees + broker's commission + clearing and grading

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Answer:

Please find the detailed answer as follows:

Explanation:

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Related concepts to understand the problem.

Competitive advantage. A competitive advantage is an improvement over competitors gained by contribuiting consumers greater value.

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In her spare time, Sharon is the chair for a local nonprofit organization. The project committee is attempting to determine what
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Answer: (D) Competing

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