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Vaughn Consulting provides weekly payroll processing for a number of small businesses. Gia Vaughn, the...

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Accounting

Vaughn Consulting provides weekly payroll processing for a number of small businesses. Gia Vaughn, the companys owner, has been using an activity-based costing system for several years. She used the following information in preparing this years budget.

Activity Cost Pool Total Cost Cost Driver Expected Driver Volume
Setting up new employees $ 79,000 Number of new employees 500
Processing weekly payroll $ 812,414 Number of paychecks printed 2,509,000
Weekly reporting $ 316,000 Number of clients 100
Annual tax reporting $ 185,700 Number of W-2s printed 61,900

1. Calculate the cost rates for each activity cost pool.

Setting Up New Employees:

Processing Weekly Payroll:

Weekly Reporting:

Annual Tax Reporting:

2. Gia is preparing a proposal for a prospective client, Jasons Juice Bar. The client has 15 employees. What is the estimated cost of providing weekly payroll services to this client for the first year?

Setting Up New Employees:

Processing Weekly Payroll:

Weekly Reporting:

Annual Tax Reporting:

Total:

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