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Wendy Chen established Windy City Coaching (WCC) to provide teen counseling and executive coaching services...

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Accounting

Wendy Chen established Windy City Coaching (WCC) to provide teen counseling and executive coaching services to its clients. WCC charges a $300 fee per hour for each service. The revenues and costs for the year are shown in the following income statement:

WINDY CITY COACHING
Income Statement
Teen Counseling Executive Coaching Total
Revenue $ 66,000 $ 147,000 $ 213,000
Expenses:
Administrative support 44,000
Transportation, etc 35,360
Equipment 16,800
Profit $ 116,840

WCC has kept good records of the following data for cost allocation purposes:

Activity Level
Activity Cost Driver Teen Counseling Executive Coaching
Providing administrative support Number of clients 6 5
Traveling Number of visits 90 170
Using equipment Computer hours 700 700

Required:

a. Complete the income statement using activity-based costing and WCCs three cost drivers. (Do not round intermediate calculations.)

b. Recompute the income statement using direct labor-hours as the only allocation base (220 hours for teen counseling; 490 hours for executive coaching). (Do not round intermediate calculations.)

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