Respuesta :
Answer:
Bridges and Lloyd
If Bridges and Lloyd switched from its current accounting method to an activity-based costing system, the amount of administrative cost chargeable to consulting services would:________.
d. decrease by $32,500.
Explanation:
a) Data and Calculations:
Total administrative cost = $250,000
Services Tax Planning Consulting Total
Traditional cost pool basis:
Billable hours to clients 65% 35% 100%
Administrative costs $162,500 $87,500 $250,000
Activity cost pool bases:
Client base 80% 20% 100%
Computer hours 70% 30% 100%
Total client transactions 80% 20% 100%
ABC Allocation:
Services Tax Planning Consulting
Staff Support $ 180,000 $144,000 $36,000
In-house computing charges 50,000 35,000 15,000
Miscellaneous office costs 20,000 16,000 4,000
Total $ 250,000 $195,000 $55,000
Tax Planning Consulting Total
Traditional $162,500 $87,500 $250,000
ABC system $195,000 $55,000 $250,000
Difference $32,500 -$32,500 $0