Lathy Elson owns a landscape maintenance service that has two major segments, residential and commercial. Lathy is trying to decide whether she should use traditional costing or activity-based costing for the purpose of allocation of overhead costs, so she develops the following estimates for her analysis and asks you to help.

Note: Please put your answers only in the section below the Bold Red sentence at the end of the Required section below. Lathy Elson owns a landscape maintenance service that has two major segments, residential and commercial. Lathy is trying to decide whether she should use traditional costing or activity-based costing for the purpose of allocation of overhead costs, so she develops the following estimates for her analysis and asks you to help. Annual revenues Annual labor costs Hours of operation Travel time, in hours Residential Commercial 410,000 1,100,000 230,000 350,000 19,000 79,000 4,000 19,000 Total 1,510,000 580,000 98,000 23,000 The business has overhead costs for equipment maintenance, transportation, and general activities of $700,000, as follows: Cost Pool Amount Cost Pool Cost Driver Hours of equipment operation Equipment Maintenance 280,000 Travel time Transportation General Activities 170,000 250,000 Labor cost Required: A. Using activity-based costing, determine the overhead rates for each activity. B. Using activity-based costing, allocate the overhead costs to each segment c. What is the income for each segment assuming the company uses activity-based costing? D. What are your general and specific recommendations to Lathy? Your answers to this open-ended assignment should be placed in the space below this line. Cost in Pool Cost Driver Units Rate Per Unit Equipment maintenance Transportation General activities B Rate Residential Commercial Total Activity Equipment maintenance Transportation General activities Total Overhead Residential Commercial Total Revenues Labor costs Overhead costs Income D Double click and enter your response here