1.A law firm uses activity-based pricing. The company%u2019s activity pools are

Question

1.A law firm uses activity-based pricing. The company%u2019s activity pools are as follows:

Cost Pool

Annual Estimated Cost

Cost Driver

Annual Driver Quantity

Consultation

196,000

Number of consultations

100 consultations

Administrative Costs

133,000

Admin labor hours

9,900 labor hours

Client Service

98,000

Number of clients

100 clients

The firm had two consultations with this client and required 130 administrative labor hours. What additional costs will be charged to this customer

Cost Pool

Annual Estimated Cost

Cost Driver

Annual Driver Quantity

Explanation / Answer

Additional Cost to be Charged for Two Consultation Cost Driver Cost $ Consulation Charges Number of Consultation          3,920 (196000/100 X2) Administration cost Admin Labour Hours          1,746 (133000/9900 X130) Clinet Service Number of Client             980 (98000/100)          6,646

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