QUESTION 8

Skyline Florists uses an activity-based costing system to compute the cost of making floral bouquets and delivering the bouquets to its commercial customers. Company personnel who earn $190,000 typically perform both tasks; other firm-wide overhead is expected to total $60,000. These costs are allocated as follows:

	Bouquet Production				Delivery				Other
Wages and salaries		70	%			20	%			10	%
Other overhead		60	%			25	%			15	%

Skyline anticipates making 25,000 bouquets and 5,000 deliveries in the upcoming year. The cost of wages and salaries and other overhead that would be charged to each delivery is closest to:

Multiple Choice

• $10.60.

• $11.28.

• $17.72.

• $31.60.

• None of the answers is correct.