Question

Cardiff and Delp is an architectural firm that provides services for residential construction projects. The following data pertain to a recent reporting period.

Activities Costs

Design department Client consultation 1,900 contact hours $ 266,000

Drawings 1,400 design hours 76,300

Modeling 44,000 square feet 30,800

Project management department

Supervision 1,200 days $ 192,000

Billings 11 jobs 8,600

Collections 11 jobs 19,340

Required: 1. & 2. Using ABC, compute the firm's activity overhead rates. Form activity cost pools where appropriate. Assign costs to a 9,200 square foot job that requires 550 contact hours, 344 design hours, and 145 days to complete. (Round activity rate answers to 2 decimal places.)

Answer 1

Computation of firm's activity overhead rates using ABC
Activity Cost pool	Cost	Total Activity		Activity rate
A	B	C		B/C
Design department
Client consultation	$266,000.00	1900	contact hours	$140.00	per contact hour
Drawings	$76,300.00	1400	design hours	$54.50	per design hour
Modeling	$30,800.00	44000	sq,feets	$0.70	per sq,feet
Project management department
Supervision	$192,000.00	1200	days	$160.00	per day
Billings	$8,600.00	11	Jobs	$781.82	per Job
Collections	$19,340.00	11	Jobs	$1,758.18	per Job
Calculation of assignment of cost to a Job
	Activity for a Job		Activity rate		Total Cost
Design department
Client consultation	550	contact hours	$140.00	per contact hour	$77,000.00
Drawings	344	design hours	$54.50	per design hour	$18,748.00
Modeling	9200	sq,feets	$0.70	per sq,feet	$6,440.00
Project management department
Supervision	145	days	$160.00	per day	$23,200.00
Billings	1	Jobs	$781.82	per Job	$781.82
Collections	1	Jobs	$1,758.18	per Job	$1,758.18
Total Cost assigned to a Job					$127,928.00