Using the activity-based costing system, compute the customer margin for the Lazzara family.
The Thornes 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 |
$274,170 |
48,100 hours |
|
Job support |
99,066 |
5,700 jobs |
|
Client support |
9,796 |
620 clients |
|
Other |
110,000 |
Not applicable |
|
Total |
$493,032 |
|
The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs.
One particular client, the Lazzara family, requested 37 jobs during the year that required a total of 222 hours of housecleaning. For this service, the client was charged $2,350.
Required:
Using the activity-based costing system, compute the customer margin for the Lazzara family. Round off all calculations to the nearest whole cent.
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