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Question: charlene is the owner of charlenes computer care 3c and...

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Charlene is the owner of Charlenes Computer Care (3C) and has been in the business of servicing computers and computer systems at affordable prices for just over five years. 3Cs primary clients are local businesses but include some residential customers. Their advertised approach is to analyze the problem, develop a range of IT options, explain their specific recommendation to the customer, and finally estimate the time and costs associated with the service prior to commencing work. Their approach has proven successful, but competition is getting much stiffer, and Charlene is concerned that her approach to determining costs and prices for any particular job is not correctly incorporating all of the companys costs. She has heard about the concept of cost allocation and asks her accountant to create an allocation system for the business Her accountant decides to implement a single-driver allocation system and needs to develop a reliable cost function to estimate total indirect costs. She will use this estimate for the numerator of the single driver overhead rate, and she will use service hours as the cost driver and denominator in the overhead rate To estimate the parameters of this cost function, the accountant first studied the behavior of last months costs, when the company spent 302 service hours repairing 47 computer systems. Here are the results of her analysis: Cost Item Utilities Office rent Administration Supplies Training Fixed Cost $294 $3,754 $3,000 $0 $332 $7,380 Variable Cost $99 $0 $194 $3,326 $310 $3,929 Total Concerned that last month may not have been a typical month and her breakdown of fixed and variable costs not completely correct, the accountant decided to use the high-low method to create another cost function. She gathered individual cost and service hour data from the last six months; the following were for the two months when costs and service hours were the lowest and the highest: low month $222 $2,988 $3,129 $1,519 $605 $8,463 249 32 high month $313 $2,988 $3,514 $3,508 $750 $11,073 574 73 Cost Item Utilities Office rent Administration Supplies Training Total Service hours Customers Next month, Charlene expects the company to spend 400 hours solving clients computer system problems REQUIRED [ROUND ALL PER-UNIT COSTS TO TWO DECIMAL PLACES AND TOTAL COSTS TO THE NEAREST DOLLAR.] Part A (6 tries; 5 points) What is the accountants estimate of total overhead next month if she uses the cost function based on her analysis of last months cost data? #1 IS CORRECT #1 IS INCORRECT Submit Answer Incorrect. Tries 3/6 Previous Tries Part B (6 tries; 5 points) What is the accountants estimate of total overhead next month if she uses the cost function based on the high-low method? $9,676 You are correct. Your receipt no. is 152-6764

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