Question

Foster Florist speciales in large floral bouquets for hotels and other commercial spaces. The company has provided the following data concering itsual overhead costs and its activity based costing system Overhead costs Wages and salaries Other expenses $100,000 97.000 $197.000 Distribution of resource consumption Activity Cost Pools Bouquet Delivery Other Total Wages and salaries Other expenses Ger The Other pool costs of the cost of capacity and organ s couts The amount of activity for the years as follows - Activity Cost Pool Making Lot activity 117, bouquets 5.900 deliveries y cost poolound to the neares What would be the overhead co d e coding to the activity based costing system in other words, what would be the overall activity rate for the deliveries

Answer 1

Answer

--Correct Answer = Option #3: $ 9.91

	Allocated to Deliveries
Wages & Salaries [$100000 x 30%]	$30,000
Other expenses [$97000 x 60%]	$58,200
Total Overhead under the activity cost pool		$88,200
Total number of deliveries		8900
Overhead cost per delivery [$88200 / 8900]		$9.91 Answer