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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.

MonthSpecial AnalysesCustomer

AccountsPaychecks

ProcessedAccounting

Service Costs14320840$58,800222001,06060,6003126085059,400411701,02059,400502201,02060,000632001,18059,000742601,06058,500811801,10060,400912201,03059,10010233097061,00011324097060,5001232901,17059,10013024088060,30014026094058,7001542401,27061,30016419080060,000Totals333,82016,160$956,100

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.

Total cost of paychecks processed$185,840Total cost of maintaining customer accounts117,656Total cost of performing special analyses130,350Total fixed costs (total for 16 months)522,254Total costs$956,100

Required:

a-1.What is the cost per unit for paychecks processed?

a-2.What is the cost per unit for customer accounts maintained?

a-3.What is the cost per unit for 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?

1,070 paychecks processed.

240 customer accounts maintained.

5 special analyses.

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