Question
Foster Florist specializes in large floral bouquets for hotels and other commercial spaces. The company has provided the following data concerning its annual overhead costs
Foster 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 $ 178,000 Other expenses 51,000 Total $ 229,000 Distribution of resource consumption: Activity Cost Pools Total Making Bouquets Delivery Other Wages and salaries 45% 20% 35% 100% Other expenses 30% 65% 5% 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 46,995 bouquets Delivery 11,800 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? Note: Round to the nearest whole cent. Multiple Choice $5.83 $6.69 $4.12 $5.40
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