Reference no: EM132549074

Duckhorn Housecleaning provides housecleaning services to its clients. The company uses an activity-based costing system for its total overhead costs. The company has provided the following budgeted data from its activity-based costing system.

Activity Cost Pool Total Cost      Total Activity

Cleaning            $645,576 72,700 hours

Job support................ $129,546 5,400 jobs

Client support............ 3 20,900 760 clients

Other $110,000 Not applicable

Total overhead 906,022

• The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs.
• One particular client, the Lumbard family, requested 31 jobs during the year that required a total of 62 hours of housecleaning. For this service, the client was charged $1,620

Question a. Assume the company decides to use a traditional costing system in which ALL costs are allocated to customers on the basis of cleaning hours. Compute the margin for the Lumbard family. Round off all calculations to the nearest whole cent.

Question b. Based on part a and the budgeted data given in the question above, assume also the following: Actual total overhead cost = $900,000; and actual activity hours = 72,000 hours, state or calculate:

1. Budgeted overhead cost
2. Budgeted activity
3. Budgeted rate
4. Actual overhead cost incurred
5. Actual activity
6. Actual absorbed
7. Under / Over absorbed