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Exercise 4-17 a-d (Part Level Submission) Manzeck Company operates a snow-removal service. The company owns five trucks, each of which has a snow plow in
Exercise 4-17 a-d (Part Level Submission) Manzeck 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. Manzeck allocates overhead based on labor hours. Total estimated overhead costs for the year are $46,120. 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 Overhead Estimated Use of Cost Drivers per Activity Activity Cost Pools Cost Drivers Plowing Square yards of surface plowed Snowthrowing Linear feet of sidewalk cleared $41,000 $5,120 205,000 64,000 (a) Your answer is correct. Determine the predetermined overhead rate under traditional costing. (Round answer to 2 decimal places, e.g. 12.25.) Predetermined overhead rate 46.12 (b) Your answer is correct. Determine the amount of overhead allocated to the average residential job using traditional costing based on labor hours. (Round answer to 2 decimal places, e.g. 12.25.) Amount of overhead allocated 23.06 (c) Determine the activity-based overhead rates for each cost pool. (Round answers to 2 decimal places, e.g. 12.25.) Activity Based Overhead Rate Plowing per square yard Snowthrowing per linear foot
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