Question
A company has three operating Expenses (A, B, and C) and four related activities (Travel, Cleaning, Customer Service, and Other). Information about consumption of the
A company has three operating Expenses (A, B, and C) and four related activities (Travel, Cleaning, Customer Service, and Other). Information about consumption of the expenses by the activities is shown in the table below:
Travel | Cleaning | Customer Service | Other | |
Expense A ($500,000) | 35% | 45% | 10% | 5% |
Expense B ($220,000) | 50% | 40% | 0% | 10% |
Expense C ($150,000) | 30% | 20% | 35% | 15% |
a) How much of Expense C will be allocated to the Customer Service Activity?
b) How much total expense will be allocated to the Cleaning Activity?
c) If there is expected to be 120,000 sq. ft. cleaned, what is the Cleaning Activity rate per sq. ft.? Round to the nearest cent $XX.XX
d) If a job requires 1,500 sq. ft. of cleaning, how much Cleaning Activity expense will be allocated to that job?
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