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midterm exam

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Question 11

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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 gas cost will be assigned to the Plowing Department?

Select one:

a. $30,000

b. $22,200

c. None of these answers are correct.

d. $50,000