Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question

Transcribed Image Text:Multiple Choice
$6.49
$5.63
$3.92
$5.20

Transcribed Image Text:Foster 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
other expenses
$ 128,000
64,000
Total
$ 192,000
Distribution of resource consumption:
Activity Cost Pools
Making
Bouquets
60%
Delivery
other
Total
Wages and salaries
other expenses
30%
10%
100%
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
Making bouquets
Delivery
Activity
57,390 bouquets
12,500 deliveries
What would be the total overhead cost per delivery according to the activity based costing system? In other words, what would be the overall activity rate for the deliveries activity cost
pool? (Round to the nearest whole cent.)
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