Green garden care Inc is a lawn and garden care service and orginaly specilized in serving small residential clients but recently started contracting for work on office building ground the owner belives that commercial lawn care is more profitable he is cosidering dropping resideinail services together

employeed worked a total of 20000 hours last year, 1300 on residential job and 7000 on commercial jobs, wages and benifits amounted to $ 10 per hour for all work done material are included in overhead, all overhead is allocated on the basis of labor hours worked which also is the basis of customer charges the company can charge $ 22 per hour for resideintial work but only $19 per hour forcommercial work

A of overhed forthe year was $ 124000 what were the profit of commercial and residential services using labor hours as the allocation base

B overhead consist od cost of transportation, equipments use and supplies which can be traced to the following activities

Activity cost driver based cost commercial residential

transportation Nu of client services $16000 15 45

equipment use equipment hours 36000 4000 2000

supplies area serviced in square yard 72000 130000 70000

total overhead $ 124000

calculate profit for commercial and residential sevices based on cost cost driver base is the total overhead cost affected by choice of traditional or ABC methods for assigneing overhead costs toproducts

what recommendation do you have for managemnet regarding the profiablity of these two types of services