Reference no: EM13554463

The accounting department of a large limousine company is analyzing the costs of its services. The cost data and level of activity for the past 16 months follow:

		Customer	Paychecks	Accounting
Month	Special Analyses	Accounts	Processed	Service Costs
1	2	325	1,029	$ 63,800
2	4	310	993	68,900
3	2	302	1,268	64,000
4	1	213	1,028	61,300
5	2	222	984	61,600
6	0	214	712	50,800
7	1	131	762	51,020
8	1	123	739	54,300
9	0	115	708	50,500
10	2	296	1,232	64,800
11	2	213	978	58,000
12	1	222	929	57,500
13	2	217	1,059	62,200
14	2	132	942	54,900
15	4	300	1,299	71,530
16	4	315	1,283	64,800
Totals	30	3,650	15,945	$959,950

In addition to the above information, you learn that the accounting department had the following total costs for the past 16 months for each of the following:

Total cost of paychecks processed	$180,100
Total cost of maintaining customer accounts	109,600
Total cost of performing special analyses	120,000
Total fixed costs (total for 16 months)	550,250
Total costs	$959,950

Required

a. What is the cost per unit for (1) paychecks processed, (2) customer accounts maintained, and (3) special analyses performed?

b. Assuming the following level of cost-driver volumes for a month, what are the accounting department's estimated costs of doing business using the account analysis approach?

• 1,000 paychecks processed
• 200 customer accounts maintained
• 3 special analyses