Question
Riley's Land Management Company has $27,000 in indirect costs operating her company. She has identified three activities that drive these indirect cost and created three
Riley's Land Management Company has $27,000 in indirect costs operating her company. She has identified three activities that drive these indirect cost and created three related cost pools as detailed below:
| Activities | Costs | Cost-drivers |
| Labor Hours | $24,000 | 1200 hours |
| Gas | $1,800 | 300 gallons |
| Invoices | $1,200 | 250 invoices |
| Total costs | $27,000 |
Riley has three divisions. Each division uses different amount of the cost driving activities as described below.
| Department | Lawn | Bush | Plowing | Total |
| Labor hours (hours) | 340 | 230 | ? | 1200 |
| Gas (gallons) | 120 | ? | 70 | 300 |
| Invoices (invoices) | 100 | 100 | 50 | 250 |
How much indirect cost would be assigned to the Lawn division if Riley uses three cost pools and allocation bases?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
M Glichkeiten Und Grenzen Der F Rderung Verantwortlichen Handelns Von Wirtschaftspr Fern In Moralisch Relevanten Situationen Eine Theoretische Und And Accounting Studies
Authors: Catharina Schmiele
2012 Edition
383493335X, 978-3834933355
