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Concord Company operates a snow-removal service. The company owns five trucks, each of which has a snow plow in the front to plow driveways
Concord 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 snowthrower 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 snowthrower machine to clear sidewalks. On commercial jobs, the drivers spend most of their time plowing. Concord allocates overhead based on labor hours. Total estimated overhead costs for the year are $40,100. Total estimated labor hours are 1,250 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 Estimated Cost Drivers Cost Pools Cost Drivers Overhead per Activity Plowing Square yards of surface plowed $35,000 175,000 Snowthrowing Linear feet of sidewalk cleared $5,100 51,000 Determine the predetermined overhead rate under traditional costing. (Round answer to 2 decimal places, e.g. 12.25.) Predetermined overhead rate Determine the amount of overhead allocated to the average residential job using traditional costing based on labor hours. (Round answer to 2 declmal places, e.g. 12.25) Amount of overhead allocated Determine the activity-based overhead rates for each cost pool. (Round answers to 2 decimal places, eg. 12.25.) Activity Based Overhead Rate Plowing %24 per square yard Snowthrowing %24 per linear foot Determine the amount of overhead allocated to the average residential job using activity-based costing. Assume that the average residential job has 20 square yards of plowing and 60 linear feet of snowthrowing. (Round answer to 2 decimai places, eg. 12.50.) Amount of overhead allocated $4
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