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The accounting department of a large limousine company is analyzing the costs of its services. The cost data and level of activity for the past 16 months follow. Accounting Analyses Accounts Processed Service Costs $ 59, 100 59, 200 60, 700 58, 300 59,900 62,000 58,100 62,000 58,400 58, 200 59,300 60, 700 62,000 59,000 58,800 61, 200 Special Customer Paychecks Month 1,220 1,270 1,270 1,160 1,100 1,030 1,180 2 220 2 3 180 3 2 160 4 200 310 150 250 5 6 4 3 8 2 170 1,180 230 1,070 1,190 1,160 1,190 880 10 280 190 11 12 2. 210 280 270 300 13 1,070 980 14 15 2 16 230 1,020 Totals 34 3,630 17,970 $956,900 In addition to the above information, you learn that the accounting department had the following total costs for the past 16 months for each of the following. Total cost of paychecks processed Total cost of maintaining customer accounts Total cost of performing special analyses Total fixed costs (total for 16 months) $208,452 110,715 136,000 501,733 Total costs $956,900 Required: a-1. What is the cost per unit for paychecks processed? a-2. What is the cost per unit for customer accounts maintained? a-3. What is the cost per unit for special analyses performed? b. Assuming the following level of cost-driver volumes for a month, what are the accounting department's estimated costs of doing business using the account analysis approach? • 910 paychecks processed. • 190 customer accounts maintained. · 2 special analyses.

The accounting department of a large limousine company is analyzing the costs of its services. The cost data and level of activity for the past 16 months follow. Accounting Analyses Accounts Processed Service Costs $ 59, 100 59, 200 60, 700 58, 300 59,900 62,000 58,100 62,000 58,400 58, 200 59,300 60, 700 62,000 59,000 58,800 61, 200 Special Customer Paychecks Month 1,220 1,270 1,270 1,160 1,100 1,030 1,180 2 220 2 3 180 3 2 160 4 200 310 150 250 5 6 4 3 8 2 170 1,180 230 1,070 1,190 1,160 1,190 880 10 280 190 11 12 2. 210 280 270 300 13 1,070 980 14 15 2 16 230 1,020 Totals 34 3,630 17,970 $956,900 In addition to the above information, you learn that the accounting department had the following total costs for the past 16 months for each of the following. Total cost of paychecks processed Total cost of maintaining customer accounts Total cost of performing special analyses Total fixed costs (total for 16 months) $208,452 110,715 136,000 501,733 Total costs $956,900 Required: a-1. What is the cost per unit for paychecks processed? a-2. What is the cost per unit for customer accounts maintained? a-3. What is the cost per unit for special analyses performed? b. Assuming the following level of cost-driver volumes for a month, what are the accounting department's estimated costs of doing business using the account analysis approach? • 910 paychecks processed. • 190 customer accounts maintained. · 2 special analyses.

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter7: Allocating Costs Of Support Departments And Joint Products
Section: Chapter Questions
Problem 30E: A company uses charging rates to allocate service department costs to the using departments. The...
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The accounting department of a large limousine company is analyzing the costs of its services. 

 

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The accounting department of a large limousine company is analyzing the costs of its services. The cost data and level of activity for the past 16 months follow. Customer Paychecks Special Analyses Accounts Accounting Processed Service Costs $ 59,100 Month 1 2 220 1,220 1,270 1,270 1,160 1,100 1,030 1,180 1,180 1,070 1,190 1,160 1,190 2 3 180 59, 200 60, 700 58, 300 59,900 62,000 58, 100 3 2 160 4 3 200 5 3 310 6. 4 150 7 3 250 8 2 170 62,000 9 230 58,400 58, 200 59, 300 60, 700 62, 000 10 1 280 11 3 190 12 2 210 13 3 280 880 14 270 1,070 59,000 58, 800 61, 200 15 2 300 980 16 1 230 1,020 Totals 34 3,630 17,970 $956,900 In addition to the above information, you learn that the accounting department had the following total costs for the past 16 months for each of the following. Total cost of paychecks processed Total cost of maintaining customer accounts Total cost of performing special analyses Total fixed costs (total for 16 months) $208,452 110,715 136, 000 501,733 Total costs $956,900 Required: a-1. What is the cost per unit for paychecks processed? a-2. What is the cost per unit for customer accounts maintained? a-3. What is the cost per unit for special analyses performed? b. Assuming the following level of cost-driver volumes for a month, what are the accounting department's estimated costs of doing business using the account analysis approach? • 910 paychecks processed. • 190 customer accounts maintained. · 2 special analyses.
Transcribed Image Text:The accounting department of a large limousine company is analyzing the costs of its services. The cost data and level of activity for the past 16 months follow. Customer Paychecks Special Analyses Accounts Accounting Processed Service Costs $ 59,100 Month 1 2 220 1,220 1,270 1,270 1,160 1,100 1,030 1,180 1,180 1,070 1,190 1,160 1,190 2 3 180 59, 200 60, 700 58, 300 59,900 62,000 58, 100 3 2 160 4 3 200 5 3 310 6. 4 150 7 3 250 8 2 170 62,000 9 230 58,400 58, 200 59, 300 60, 700 62, 000 10 1 280 11 3 190 12 2 210 13 3 280 880 14 270 1,070 59,000 58, 800 61, 200 15 2 300 980 16 1 230 1,020 Totals 34 3,630 17,970 $956,900 In addition to the above information, you learn that the accounting department had the following total costs for the past 16 months for each of the following. Total cost of paychecks processed Total cost of maintaining customer accounts Total cost of performing special analyses Total fixed costs (total for 16 months) $208,452 110,715 136, 000 501,733 Total costs $956,900 Required: a-1. What is the cost per unit for paychecks processed? a-2. What is the cost per unit for customer accounts maintained? a-3. What is the cost per unit for special analyses performed? b. Assuming the following level of cost-driver volumes for a month, what are the accounting department's estimated costs of doing business using the account analysis approach? • 910 paychecks processed. • 190 customer accounts maintained. · 2 special analyses.
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