Happy Valley Land and Snow Company provides the following ABC costing information:
Activities Total Costs Activity-cost drivers
Labor hours $320,000 8,000 hours
Gas $36,000 6,000 gallons
Invoices $40,000 2,500 invoices
Total costs $396,000
The above activities used by their three departments are:
Lawn Department Bush Department Plowing Department
Labor hours 2,500 hours 1,200 hours 4,300 hours
Gas 1,500 gallons 800 gallons 3,700 gallons
Invoices 1,600 invoices 400 invoices 500 invoices
How much of the labor cost will be assigned to the Lawn Department?
A) $100,000
B) $25,600
C) $40,000
D) None of these answers are correct.
How much of the gas cost will be assigned to the Plowing Department?
A) $50,000
B) $22,200
C) $30,000
D) None of these answers are correct.
How much of invoice cost will be assigned to the Bush Department?
A) $6,400
B) $8,000
C) $25,600
D) $40,000
How much of the gas cost will be assigned to the Lawn Department?
A) $4,800
B) $20,000
C) $9,000
D) $22,200