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Bramble Company operates a snow-removal service. The company owns five trucks, each of which has a snow plow in the front to plow driveways
Bramble Company operates a snow-removal service. The company owns five trucks, each of which has a snow plow in the front to plow driveways and a snow thrower in the back to clear sidewalks. Because plowing snow is very tough on trucks, the company incurs significant maintenance costs. Truck depreciation and maintenance represents a significant portion of the company's overhead. The company removes snow at residential locations, in which case the drivers spend the bulk of their time walking behind the snow- thrower machine to clear sidewalks. On commercial jobs, the drivers spend most of their time plowing. Bramble assigns overhead based on labor hours. Total estimated overhead costs for the year are $42,880, Total estimated labor hours are 1,000 hours. The average residential property requires 0.5 hours of labor, while the average commercial property requires 2.5 hours of labor. The following additional information is available. Estimated Use of Activity Cost Pools Cost Drivers Estimated Overhead Cost Drivers per Activity Plowing Square yards of surface plowed $37,000 185,000 Snowthrowing Linear feet of sidewalk cleared $5,880 42,000 (a) Determine the predetermined overhead rate under traditional costing. (Round answer to 2 decimal places, eg. 12.25.) Predetermined overhead rate $ /labor hour eTextbook and Media
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