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Copy of Riley's Land Management Company has $27,000 in indirect costs operating her company. She has identified three activities that drive these indirect cost and

Copy of Riley's Land Management Company has $27,000 in indirect costs operating her company. She has identified three activities that drive these indirect cost and created three related cost pools as detailed below:

Activities Costs Cost-drivers
Labor Hours $24,000 1000 hours
Gas $1,800 500 gallons
Invoices $1,200 250 invoices
Total costs $27,000

Riley has three divisions. Each division uses different amount of the cost driving activities as described below.

Department

Lawn

Bush

Plowing

Total
Labor hours (hours)

370

220

?

1000
Gas (gallons)

150

?

80

500
Invoices (invoices)

?

70

50

250

If Riley allocates indirect costs to each division using the three cost pool above and three allocation rates how much of the $1,800 in indirect costs driven by gallons of gas used labor hours will be allocated to the lawn division?

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