Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Check my work Elite Lawn & Plowing (EL&P) is a lawn and snow plowing service with both residential and commercial clients. The owner believes that

image text in transcribed
image text in transcribed
Check my work 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 Twenty employees worked a total of 37,000 hours last year, 23,000 on residential jobs and 14.000 on commercialjobs. Wages were $16 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 $34 per hour for residential work, but only $26 per hour for commercial work Required: a. If overhead for the year was $131,480, what were the profits of the residential and commercial services using lobor-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, Cost Driver Volume Activity Cost Driver Cost Commercial Residential Traveling Number of clients served $ 16,200 15 Using equipment Equipment hours 38,280 3,500 2,300 77,000 Area serviced in square yards 150,000 Using supplies 70,000 Total overhead $131, 480 45 baros Do not round intermediate 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 Overhead Profit Total Overhead b. Profit

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

College Accounting Chapters 1 24

Authors: Douglas J. Mcquaig, Patricia Bille, Tracie L. Nobles

10th Edition

1439037752, 9781439037751

More Books

Students also viewed these Accounting questions

Question

Did you trace the accomplishments, issues, and milestones?

Answered: 1 week ago