Patterson Lawn Co. wants to determine the cost of each lawn care maintenance job. The Company has two operating departments, one that performs lawn care services for commercial properties and one that services residential properties. Both operating departments are supported by two service departments, administrative and machine maintenance. Costs for each of these supporting departments are as follows: Administrative Machine Maintenance Total cost $334,800 $1,809,eee The following estimates that are related to the operating departments is as follows: Residential Commercial properties properties Total #of employees 51 42 93 # of customers 180 215 395 of billable hours 14,000 13,e00 27,000 Total overhead cost $405,000 $480,000 $885,000 Note that total overhead cost includes costs allocated from service departments and other overhead costs. The Company uses the direct method for all cost allocations. Assume that total overhead cost is allocated based on the # of billable hours incurred by each operating department. Suppose a lawn care maintenance job in the residential properties department has a direct cost of $260 and takes 13 hours to complete. What is the total cost of this job? (Round your intermediate calculations.) Multiple Cholce $1,080 $663 $260 $403 Patterson Lawn Co. is the primary provider of lawn care maintenance in the city of Jasper. The Company has two operating departments, one that performs lawn care services for commercial properties and one that services residential properties. Both operating departments are supported by two service departments, administrative and machine maintenance. Costs for each of these supporting departments are as follows: Administrative Machine Maintenance Total cost $150,e00 $225,000 The following estimates that are related to the operating departments as follows: Residential Commercial properties properties Total # of employees 40 20 60 # of customers 125 160 285 # of billable hours 3,000 2,ee0 5,000 Total overhead cost $425,00e $350,000 $775,000 Note that total overhead cost includes costs allocated from service departments and other overhead costs. The Company uses the direct method to allocate service department cost to the operating departments. In order to allocate administrative costs, the Company has elected to use the #of employees as the cost driver. To allocate machine maintenance costs, the Company uses the # of billable hours as the cost driver. Based on the information provided, how much of the administrative cost will be allocated to the residential properties operating department? Multiple Choice $100,000 $150,000 $120,000 $50,000 Patterson Lawn Co. is the primary provider of lawn care maintenance in the city of Jasper. The Company has two operating departments, one that performs lawn care services for commercial properties and one that services residential properties Both operating departments are supported by two service departments, administrative and machine maintenance. Costs for each of these supporting departments are as follows: Administrative Machine Maintenance Total cost $150,e0e $225,000 The following estimates that are related to the operating departments is as follows: Commercial Residential Total properties properties # of employees 40 20 60 # of customers 125 160 285 3, # of billable hours 2,eee 5,00 $775,000 Total overhead cost* $425,000 $350,000 *Note that total overhead cost includes costs allocated from service departments and other overhead costs. The Company uses the direct method to allocate service department cost to the operating departments. In order to allocate administrative costs, the Company has elected to use the # of employees as the cost driver. To allocate machine maintenance costs, the Company uses the # of billable hours as the cost driver. Based on the information provided, how much of the machine maintenance cost will be allocated to the commercial properties operating department? Multiple Cholce $135,000 $90,000 $120,000 $225,000
