I need help understanding what is going on in this test.

UPLOAD YOUR SOLUTIONS USING ONE OF THE FORMATS REQUIRED. YOU ARE ONLY PERMITTED ONE SUBMISSION. YOU MUST SHOW YOUR WORK FOR EACH PART!!

Sykurmolarnir Company operates a snowremoval service in Reykjavik, Iceland. The company owns five trucks, each of which has a snow plow in the front to plow driveways and a snow thrower in the back to clear sidewalks. Because plowing snow is very tough on trucks, the company incurs significant maintenance costs. Truck depreciation and maintenance represents a significant portion of the companys overhead. The company removes snow at residential locations, in which case the drivers spend the bulk of their time walking behind the snow thrower machine to clear sidewalks. On commercial jobs, the drivers spend most of their time plowing. Sykurmolarnir allocates overhead based on labor hours. Total overhead costs for the year are $42,000. Total estimated labor hours are 1,500 hours. The average estimated residential property requires 0.5 hours of labor, while the average commercial property requires 2.5 hours of labor. The following additional information is available.

Activity Cost Pools	Cost Drivers	Estimated Overhead	Expected Use of Cost Drivers per Activity
Plowing	Square yards of surface plowed	$38,000	200,000
Snow throwing	Linear feet of sidewalk cleared	$4,000	50,000

Instructions

(a) Determine the predetermined overhead rate under traditional costing.

(b) Determine the amount of overhead allocated to the average residential job using traditional costing based on labor hours.

(c) Determine the activitybased overhead rates for each cost pool.

(d) Determine the amount of overhead allocated to the average residential job using activitybased costing. Assume that the average residential job has 20 square yards of plowing and 60 linear feet of snow throwing.