Managerial Accounting Assignment | Top Universities

Managerial Accounting: Please explain and show all steps.

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30. ABC versus traditional costing. Danny Whelan provides consulting and tax preparation services to his clients. He charges a fee of $100 per hour for each service. His revenues and expenses for the year are shown in the following income statement: Consulting Тах Total $120,000 $200,000 Revenue $80,000 Expenses: Filing, scheduling, and data entry 40,000 Supplies 36,000 Computer costs 20,000 Profit $104,000 Danny has kept records of the following data for cost allocation purposes Activity Level Таx Preparation Expenses Cost Driver Consulting Filing, scheduling, and data entry Number of Clients 72 48 Supplies Number of Hours Billed 800 1,200 Computer costs Computer Hours 600 1,000 Complete the income statement using these three cost drivers. b. Recompute the income statements using hours billed as the only allocation base c. How might Danny's decisions be altered if he were to use only hours billed to allocate expenses? Get Accounting Homework Help Today

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