Paula's Payroll Services Provides Weekly Payroll Processing for a Number

Essay

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.


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.