Fundamentals of Cost Accounting 2nd Edition by William Lanen, Carolyn Wells, Michael Maher

Exercise 6

Account Analysis
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:

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:

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