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Paula's Payroll Services provides weekly payroll processing for a number of small businesses. Paula ...

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Paula's Payroll Services provides weekly payroll processing for a number of small businesses. Paula ...

Paula's Payroll Services provides weekly payroll processing for a number of small businesses. Paula Peraz, the company's owner, has been using an activity-based costing system for several years. She used the following information in preparing this year's budget.

Expected

Activity Cost Pool

Total Cost

Cost Driver

Driver Volume

Setting up new employees	$ 78,000	Number of new employees	600
Processing weekly payroll	780,000	Number of paychecks printed	2,600,000
Weekly reporting	350,000	Number of clients	125
Annual tax reporting	245,000	Number of W-2s printed	70,000

Required:

a.	Calculate the cost rates for each activity cost pool.

b.	Paula is preparing a proposal for a prospective client, Barney's Bistro. The client has

25 employees. What is the estimated cost of providing weekly payroll services to this client for the first year?

c.	How can Paula use the estimated cost information you have calculated to price the

service
it will provide to Barney's Bistro.

Textbook

Managerial Accounting

Edition: 4^th

Author: Davis

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danny2012 Author

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Just got PERFECT on my quiz

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I appreciate what you did here, answered it right Smiling Face with Open Mouth

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Thanks for your help!!

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