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JULI LULU Elena Environmental Ltd. is a lawn care company. It currently allocates its indirect costs using direct labour hours as the only cost driver.

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JULI LULU Elena Environmental Ltd. is a lawn care company. It currently allocates its indirect costs using direct labour hours as the only cost driver. The total indirect costs for 2019 are estimate at $81,000. Total direct labour hours are estimate at 1,080 hours. The firm is thinking of using an activity-based costing system based on the following: Activity Cost Pool Total Estimate Costs Total Estimated Activity Office Costs $48,000 1,920 invoices issued Depreciation on fertilizer equipment 12,560 411 fertilizer orders Depreciation on lawnmowers 20,440 730 lawn cutting hours Cost and activity data related to two clients: Client 100 Client 101 Direct labour hours 25 28 Number of invoices 6 Number of fertilizer orders 6. 2 Number of lawn cutting hours 20 28 Required: A) Calculate the amount of overhead that would be allocated to client 100 and client 101 using total direct hours as the only cost driver b) Calculate the amount of overhead that would be allocated to client 100 and client 101 using the activity-based costing system. Round the activity rates to the nearest full cent. 1

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