Copy of Riley's Land Management Company has $27,000 in indirect costs operating her company. She has identified three activities that drive these indirect cost and created three related cost pools as detailed below:

Activities	Costs	Cost-drivers
Labor Hours	$24,000	600 hours
Gas	$1,800	500 gallons
Invoices	$1,200	250 invoices
Total costs	$27,000

Riley has three divisions. Each division uses different amount of the cost driving activities as described below.

Department	Lawn	Bush	Plowing	Total
Labor hours (hours)	370	220	?	600
Gas (gallons)	170	?	70	500
Invoices (invoices)	?	40	70	250

If Riley allocates indirect costs to each division using the three cost pool above and three allocation rates how much of the 24,000 indirect costs driven by labor hours will be allocated to the lawn division?

Answer rating: 100% (QA)

Cost pool for labor hours is 24000 Total cost driver for labor hours is 600 hours Lawn divi... View the full answer