**Activity-Based Costing for Allen Company**Allen Company has three departments—Lawn, Bush, and Plowing. Allen Company utilizes Activity-Based Costing (ABC) to allocate its three office costs (labor, gas, and invoices) among these departments. Below is the provided information about the office costs and the activity-cost drivers.### Office Costs| Activities | Total Costs | Activity-Cost Drivers ||------------|-------------|-----------------------|| Labor | $320,000 | 8,000 hours || Gas | $36,000 | 6,000 gallons || Invoices | $40,000 | 2,500 invoices || **Total Costs** | **$396,000** | |### Departmental BreakdownThe usage of the above activities by the three departments is as follows:| Activities | Lawn Department | Bush Department | Plowing Department ||------------|-----------------|-----------------|---------------------|| **Labor** | 2,500 hours | 1,200 hours | 4,300 hours || **Gas** | 1,700 gallons | 800 gallons | 3,500 gallons || **Invoices**| 1,600 invoices | 400 invoices | 500 invoices |### Cost Allocation Query**Question:** How much of the total cost will be assigned to the Plowing Department?**Example of Answer Format:** 4000 (No comma, space, decimal point, or $ sign)**Answer:** 21000

The question is based on the concept of Cost Accounting.In order to calculate the total cost…

Allen Company has three departments - Lawn, Bush, and Plowing. Allen Company uses ABC for the allocation of its three office costs (1 gas, invoices) among the three departments. The following information is provided about the office costs: Activities Labor Gas Invoices Total costs Total Costs Labor Gas Invoices $320,000 $36,000 $40,000 $396,000 Activity-cost drivers The above activities used by their three departments are: Lawn Department 2,500 hours 1,700 gallons 1.600 invoices 8,000 hours 6,000 gallons 2,500 invoices Bush Department 1,200 hours 800 gallons 400 invoices Plowing Department 4,300 hours 3,500gallons 500 invoices

Allen Company has three departments - Lawn, Bush, and Plowing. Allen Company uses ABC for the allocation of its three office costs (1 gas, invoices) among the three departments. The following information is provided about the office costs: Activities Labor Gas Invoices Total costs Total Costs Labor Gas Invoices $320,000 $36,000 $40,000 $396,000 Activity-cost drivers The above activities used by their three departments are: Lawn Department 2,500 hours 1,700 gallons 1.600 invoices 8,000 hours 6,000 gallons 2,500 invoices Bush Department 1,200 hours 800 gallons 400 invoices Plowing Department 4,300 hours 3,500gallons 500 invoices

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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