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Business, 07.04.2020 18:50 MyaaaMoney

Forse Florist specializes in large floral bouquets for hotels and other commercial spaces. The company has provided the following data concerning its annual overhead costs and its activity based costing system:

Overhead costs:
Wages and salaries $ 159,000
Other expenses 62,000
Total $ 221,000

Distribution of resource consumption:
Activity Cost Pools
Making
Bouquets Delivery Other Total
Wages and salaries 45% 20% 35% 100%
Other expenses 45% 50% 5% 100%
The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs.

The amount of activity for the year is as follows:

Activity Cost Pool Activity
Making bouquets 124,312 bouquets
Delivery 8,200 deliveries

What would be the total overhead cost per bouquet according to the activity based costing system? In other words, what would be the overall activity rate for the making bouquets activity cost pool?

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Answers: 1

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