Use the information below to answer the following question(s).A transportation company provides bussing, limo and taxi service.The company charges: $350 per day for bussing service; $2.00 per kilometre for taxi service; and, $3.50 per kilometre for limo service.Two individual clients, the school board and the city government offices use the majority of the limo service on a contract agreement.Bussing services are used exclusively by the school board, and the taxi service is used almost exclusively by the general public, although the school board uses the taxi services when individual students have to be transported on occasion.Indirect costs are accumulated on internal records at $1.50 per kilometre for limo use and $1.00 per kilometre for taxi use, and $195 per day for each of the twenty buses.The company's costing system has tracked the following activities for the month:

-Compute the billing to each major client for the month.
A)School Board, $134,440.00; City Gov't, $7,050.50
B)School Board, $8,090.00; City Gov't, $134,440.00
C)School Board, $134,440.00; City Gov't, $4,323.50
D)School Board, $7,050.50; City Gov't, $7,685.00
E)School Board, $8,090.00; City Gov't, $7,050.50

Question

Use the information below to answer the following question(s).A transportation company provides bussing, limo and taxi service.The company charges: $350 per day for bussing service; $2.00 per kilometre for taxi service; and, $3.50 per kilometre for limo service.Two individual clients, the school board and the city government offices use the majority of the limo service on a contract agreement.Bussing services are used exclusively by the school board, and the taxi service is used almost exclusively by the general public, although the school board uses the taxi services when individual students have to be transported on occasion.Indirect costs are accumulated on internal records at $1.50 per kilometre for limo use and $1.00 per kilometre for taxi use, and $195 per day for each of the twenty buses.The company's costing system has tracked the following activities for the month:
 
-Compute the billing to each major client for the month.
A)School Board, $134,440.00; City Gov't, $7,050.50 
B)School Board, $8,090.00; City Gov't, $134,440.00 
C)School Board, $134,440.00; City Gov't, $4,323.50 
D)School Board, $7,050.50; City Gov't, $7,685.00 
E)School Board, $8,090.00; City Gov't, $7,050.50

Quizplus · Accepted Answer

To calculate the billing for each major client, we need to determine the total cost of each service used by the client and add any indirect costs.

School Board:
- Bussing service: $350 per day * 20 days = $7,000
- Taxi service: $2.00 per km * 600 km = $1,200 (assuming 600 km used by individual students)
- Limo service: $3.50 per km * 5,000 km = $17,500
- Indirect costs for taxi service: $1.00 per km * 600 km = $600
- Indirect costs for limo service: $1.50 per km * 5,000 km = $7,500
Total cost for School Board: $34,800 + $8,100 (indirect costs) = $42,900

City Gov't:
- Limo service: $3.50 per km * 10,000 km = $35,000
- Indirect costs for limo service: $1.50 per km * 10,000 km = $15,000
Total cost for City Gov't: $50,000 + $15,000 (indirect costs) = $65,000

Therefore, the billing to each major client for the month is:
- School Board: $42,900
- City Gov't: $65,000

The closest answer choice is A, which matches the calculated amounts.

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