Exercise 9-39 Activity-Based Costing in a Service Environment (Lo 9-3, 4, 5) Elite awn & Plowing (ELBP)ia a lawn and snow plowing service wth both residential and commercial dropping the residential service. Twenty employees worked a total of 20,000 hours last year, 13,000 on residential jobs and 7,000 on commercial jobs. Wages supplies. All overhead is allocated on the basis of labor-hours worked, which is also the basis for customer charges. Because residential work, but only $45 per hour for commercial work. Required: a. If overhead for the year was $205,000, what were the profts of the residential and commercial services using labor-hours a Commercial Residential Revenue Direct Labor Overhead Profit b. Overhead consists of costs of traveling to the site, using equipment (including vehicle rental), and using supplies, which can b Cost Driver Volume Activity Traveling Using equipment Using supplies Total overhead Cost Driver Cost Commercial Residential S 25,000 Number of cients served Equipment hours Area serviced in square yards 24 60,000 1,775 120,000 65,000 76 1,225 35,000 $ 205,000 Recalculate profits for commercial and residential services based on these activity bases Commercial Residential Total Overhead Profit