A company has three operating Expenses (A, B, and C) and four related activities (Travel, Cleaning, Customer Service, and Other). Information about consumption of the expenses by the activities is shown in the table below: Travel Cleaning Customer Service Other 10% 10% 0% 10% 35% 15% a) How much of Expense A will be allocated to the Cleaning Activity? b) How much total expense will be allocated to the Travel Activity? c) If there are expected to be 450 trips, what is the Travel Activity rate per trip? Round to the nearest cent $XX.XX Expense A ($500,000) 35% 45% Expense B ($220,000) 50% 40% Expense C ($150,000) 30% 20%

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Overheads

In cost accounting, overhead refers to those expenses which occur during the operating of a business. Overhead includes the fixed, variable, or semi-variable which is not directly involved with a company product or service. It is very important to analyze overhead expense as it helps the company in determining how much a company must charge for its products and services so that they can generate profit.  Overhead expenses depend upon the nature of the business operations.