Sullivans Auto Repair does small repair jobs on automobiles, including oil changes, brake jobs, and tire repair.
Question:
Sullivan’s Auto Repair does small repair jobs on automobiles, including oil changes, brake jobs, and tire repair. It divides its company into the following activities and cost pools.
REQUIRED:
a. Calculate the activity cost rates for each of the cost pools.
b. One customer needs an oil change, one tire repaired, radiator fluid, which takes five minutes to add to the car, and new brake shoes, which take half an hour to put on. What is the total cost of servicing this customer?
Driver Activity Driver Cost Frequency Oil changes Number of oil changes done 10,000 $100,000 Brake repairs Hours of repair 2,000 $50,000 Tire repairs Tires repaired $40,000 5,000 Radiator repairs Hours of repair 1,000 $25,000 Customer service Number of customers 5,000 $30,000
Step by Step Answer:
a To calculate the activity cost rates for each of the cost pools we divide the total cost for ...View the full answer
Managerial Accounting An Integrative Approach
ISBN: 9780999500491
2nd Edition
Authors: C J Mcnair Connoly, Kenneth Merchant
Related Video
In our daily life, most of us face a common problem while driving a car and that is the car gets heated up. Mostly in summer when it is too hot outside we use car AC all the time and that’s how our car gets hot, and sometimes car radiators get heated or leaked. Most of us wait for it to cool down and wait for mechanics to come and solve the problem. But today we have a very interesting solution to this problem. Take a sachet of psyllium husk. Now open the car bonnet and then open the radiator of the car. Now open the sachet of psyllium husk and add it to the radiator. After that add water to it which helps the psyllium husk to set in the base or leaking area. It blocks the leaked area because of its fatty acid nature. It contains Tritriacontane acid., which consists of fibers
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