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 $ 70,000 Other expenses 50,000 Total $ 120,000 Distribution of resource consumption Activity Cost Pools Making Bouquets Delivery Other Total Wages and salaries 70 20 10 100 Other expenses 45 25 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 40,000 bouquets Delivery 1,000 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 whole cent )

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Oct 01, 2024

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	$	70,000
Other expenses		50,000
Total	$	120,000

Distribution of resource consumption:

	Activity Cost Pools
	Making Bouquets	Delivery	Other	Total
Wages and salaries	70%	20%	10%	100%
Other expenses	45%	25%	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	40,000	bouquets
Delivery	1,000	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 whole cent.)