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Allocation Cost Based on Activity Based Costing

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A law firm uses activity-based pricing. The company's activity pools are as follows:
Cost Pool Annual Estimated Cost
Cost Driver
Annual Driver
Quantity Consultation: 200,000
Number of Consultations: 100 consultations
Administrative Costs: 150,000
Admin Labor Hours: 10,000 labor hours
Client Service: 99,000
Number of Clients: 110 clients

The firm had two consultations with this client and required 130 administrative labor hours. What additional costs will be charged to this customer?

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Solution Summary

The solution computes additional cost for a law firm using activity based costing.

Solution Preview

First lets compute the cost per activity (Cost divided by the number of ...

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