discussion board

Anonymous
timer Asked: Apr 13th, 2017
account_balance_wallet $10

Question description

Discussion board question due by 9 pm thursday april 13, 2017. Please ask if you have any questions.

9-41* A c t i v i t y - B a s e d v e r s u s T r a d i t i o n a l C o s t i n g — E t h i c a l I s s u e s •mm (LQ 4, 5 ) Wendy Chen established Windy City Coaching (WCC) to provide teen counseling and executive coaching services to its clients. WCC charges a $300 fee per hour for each service. The revenues and costs for the year are s l y w n in the following income statement: WINDY CITY COACHING Income Statement Revenue - Teen Counseling Executive Coaching Total $66,000 $135,000 $201,000 Expenses: = Administrative support i » Transportation, etc. 36,000 Equipment 20.000 40,000 Profit $105,000 WCC has kept good records of the following data for cost allocation purposes: Activity Level Activity Cost Driver Providing administrative support Number of clients ^• Teen Executive Counseling Coaching 6 4 Traveling Number of visits 100 150 Using equipment Computer hours 900 700 Required 4/13/2017 BcxDkshelf Ambassadored: Fundamentals of Cost Accounting a. Complete the income statement using activity-based costing and WCC's three cost drivers. b. Recompute the income statement using direct labor-hours as the only allocation base (220 hours for teen counseling; 450 hours for executive coaching). c. How might WCC's decisions regarding pricing or dropping a service be altered i f Wendy were to allocate all overhead costs using direct labor-hours? d. Under what circumstances would the labor-based allocation and activity-based costing (using Wendy's three cost drivers) result i n similar profit results? e. A local nonprofit charity is looking for worthy causes to support through financial grants. A p r i m a r y criterion for support is financial need. Wendy is thinking of applying for support for the teen counseling program. W h i c h allocation method would give her the best chance of wanning a grant? Would i t be ethical for Wendy to report the income using this method i n her application?

Tutor Answer

Missmourine
School: Rice University

Find the attached document,Best Regards.

1
Surname

Student’s Name
Instructor’s Name
Course
Date

Account

Rate

Revenue

Teen counselling

Executive coaching

Total

$66000

$135000

$201000

Expenses
Adm. support

$4000

a

24000

d

16000

40000

Transportation 144

b

14400

e

21600

36000

Equipment

c

11250

f

8750

20000

$88650

$105000

12.50

Profit

$16350

a. = 40,000/10
=$4000 per client
b. 36000/250
=$144 per visit
c. $2000/1600
=$12.50 computer p...

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Review

Anonymous
Goes above and beyond expectations !

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