3 Elite Lawn & Plowing (EL&P) is a lawn and snow plowing service with both residential and commercial clients. The owner believes that the commercial sector has more growth opportunities and is considering dropping the residential service. 2 points Twenty employees worked a total of 38,000 hours last year, 25,000 on residential jobs and 13,000 on commercial jobs. Wages were $13 per hour for all work done. Any materials used are included in overhead as supplies. All overhead is allocated on the basis of labor-hours worked, which is also the basis for customer charges. Because of increased competition for commercial accounts, EL&P can charge $32 per hour for residential work, but only $28 per hour for commercial work. Skipped eBook Required: a. If overhead for the year was $109,310, what were the profits of the residential and commercial services using labor-hours as the allocation base? (Do not round intermediate calculations. Round final answers to the nearest whole dollar.) b. Overhead consists of costs of traveling to the site, using equipment (including vehicle rental), and using supplies, which can be traced as follows. Print References Activity Traveling Using equipment Using supplies Total overhead Cost Driver Number of clients served Equipment hours Area serviced in square yards Cost $ 15,080 38,430 55,800 $ 109,310 Cost Driver Volume Commercial Residential 13 45 4,000 2,100 100,000 80,000 Recalculate profits for commercial and residential services based on these activity bases. (Do not round intermediate calculations. Round final answers to the nearest whole dollar.) Commercial Residential a. Revenue Direct Labor 4 The Personnel Department at LastCall Enterprises handles many administrative tasks for the two divisions that make up lastCall: LaidBack and Stressed Out. Laidback division manages the company's traditional business line. This business, although lucrative, is currently not growing. Stressed Out, on the other hand, is the company's new business, which has experienced double-digit growth for each of the last three years. 2 points Skipped The cost allocation system at LastCall allocates all corporate costs to the divisions based on a variety of cost allocation bases. Personnel costs are allocated based on the average number of employees in the two divisions. eBook There are two basic activities in the Personnel Department. The first, called employee maintenance, manages employee records. Virtually all of this activity occurs when employees are hired or leave the company. The other activity is payroll, which is an ongoing activity and requires the same amount of work for each employee regardless of the employee's salary. Print References Assorted data for LastCall for the last year follow. Number of employees (average) Employees hired/leaving Laidback 110 7 StressedOut 30 25 Total 140 32 The Personnel Department incurred the following costs during the year. Employee maintenance Payroll Total $ 160,000 14,000 $ 174,000 Required: a. Under the current allocation system, what are the costs that will be allocated from personnel to Laidback? To Stressed Out? b. Suppose the company implements an activity-based cost system for personnel with the two activities, employee maintenance and payroll. Use the number of employees hired/leaving as the cost driver for employee maintenance costs and the average number of employees for payroll costs. What are the costs that will be allocated from personnel to Laidback? To Stressed Out? 2 points Skipped Complete this question by entering your answers in the tabs below. eBook Print Required A Required B References Suppose the company implements an activity-based cost system for personnel with the two activities, employee maintenance and payroll. Use the number of employees hired/leaving as the cost driver for employee maintenance costs and the average number of employees for payroll costs. What are the costs that will be allocated from personnel to Laidback? To Stressedout? Show less LaidBack StressedOut Employee maintenance Payroll