Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

image text in transcribed
Elite Lawn & Plowing (EL&P) is a lawn and snow plowing service with both residential and commercial clients. The owner believes that the commerciai sector has more growth opportunities and is considering dropping the residential service. Twenty employees worked a total of 47,000 hours last year, 30,000 on residential jobs and 17,000 on commercial jobs. Wages were $15 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 $36 per hour for residential work, but only $27 per hour for commercial work a. t overhead for the year was $121,280, what were the profts of the residential and the commercial services using labor-hours as the allocation base? (Do not round intermediate calculations.) Required Profit Commercial Residential b. overhead consists of costs of traveling to the ste, using equipment (nciuding vehicle renta), and using supplies, which can be traced as follows Cost Driver Volume Cost Commercial Residential $ 17,360 33,920 70,000 120,000 $ 121,280 Cost Driver Activity Traveling Using equipment Using supplies 50 12 3,400 Number of clients served Equipment hours Area serviced in square yards 1.900 80,000 Total overhead Recalculate profts for commercial and residential services based on these activity bases (Do not round intermediate calculations.) Profit Commercial Residential

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

Auditing The Master A Tax Collector Report

Authors: B. Cobbey Crisler

1st Edition

1912297108, 978-1912297108

More Books

Students also viewed these Accounting questions

Question

Describe the steps in a traditional manual purchasing system.

Answered: 1 week ago

Question

c. What groups were least represented? Why do you think this is so?

Answered: 1 week ago