Question
Fogle Florist specializes in large floral bouquets for hotels and other commercial spaces. The company has provided the following data concerning its annual overhead costs
Fogle Florist specializes in large floral bouquets for hotels and other commercial spaces. The company has provided the following data concerning its annual overhead costs and its activity based costing system: Overhead costs: Wages and salaries $143,000 Other expenses 60,000 Total $203,000 Distribution of resource consumption: Activity Cost Pools Making Bouquets Delivery Other Total Wages and salaries 55% 35% 10% 100% Other expenses 40% 30% 30% 100% The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs. The amount of activity for the year is as follows: Activity Cost Pool Activity Making bouquets 58,325 bouquets Delivery 8,500 deliveries What would be the total overhead cost per delivery according to the activity based costing system? In other words, what would be the overall activity rate for the deliveries activity cost pool? (Round to the nearest cent.) $7.58 $6.30 $8.01 $8.87
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