Using the activity-based costing system, compute the customer margin for the Lazzara family.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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The Thornes Cleaning Brigade Company provides housecleaning services to its clients. The company uses an activity-based costing system for its overhead costs. The company has provided the following data from its activity-based costing system.

 

Activity Cost Pool

Total Cost

Total Activity

Cleaning

$274,170

48,100 hours

Job support

99,066

5,700 jobs

Client support

9,796

620 clients

Other

 110,000

Not applicable

Total

$493,032

 

             

 

The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs.

One particular client, the Lazzara family, requested 37 jobs during the year that required a total of 222 hours of housecleaning. For this service, the client was charged $2,350.

 

Required:

 Using the activity-based costing system, compute the customer margin for the Lazzara family. Round off all calculations to the nearest whole cent.

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