a) Determine the predetermined overhead rate under traditional costing. b) Determine the amount of overhead allocated to the average residential job using costing based on labor hours. c) Determine the activity-based overhead rates for each cost pool. d)Determine the amount of overhead allocated to the average residential job using activity-based costing. Assume that the average residential job has 20 square yards of plowing and 60 linear feet of snow throwing. (e) Discuss your findings from parts (b) and (d
Manzeck Company operates a snow-removal service. The company owns five trucks, each of which has a snowplow in the front to plow driveways and a snowthrower in the back to clear sidewalks. Because plowing snow is very tough on trucks, the company incurs significant maintenance costs. Truck
Activity Cost Pools Cost Drivers Estimated Overhead
Plowing Square yards of surface plowed $38,000
Snow throwing Linear feet of sidewalk cleared $4,000
Expected use of Cost Drivers per Activity
2000,000
50,000
a) Determine the predetermined overhead rate under traditional costing.
b) Determine the amount of overhead allocated to the average residential
c) Determine the activity-based overhead rates for each cost pool.
d)Determine the amount of overhead allocated to the average residential job using
activity-based costing. Assume that the average residential job has 20 square yards of plowing and 60 linear feet of snow throwing.
(e) Discuss your findings from parts (b) and (d
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