USA, has established four activity cost pools and the following budgeted activity for each cost pool: Activity
Question:
USA, has established four activity cost pools and the following budgeted activity for each cost pool:
Activity Cost Pool | activity measure | Total activity of the year |
job estimation | Number of work estimates | 300 estimates |
lawn care | Number of direct labor-hours | 5,000 direct labor hours |
exterior design | Number of design hours | 200 design hours |
Other | Maintenance costs of the facilities that are | Does not apply |
not assigned to jobs |
GibsonGibson
estimates that
Lawn with lake viewLawn with lake view
USA costs are distributed to activity cost pools as follows:
job estimation | lawn care | exterior design | Other | Total | ||||
Wages and salaries | 5% | 70% | 10% | 15% | 100% | |||
Depreciation | 20% | 60% | 5% | 15% | 100% | |||
supplies | 0% | 100% | 0% | 0% | 100% | |||
Other general expenses | 5% | 40% | 25% | 30% | 100% |
Vista
Office Park, a new development in a nearby community, has contacted
lake view
USA to provide an estimate for landscape design and annual lawn maintenance. It is estimated that the work will require a single landscape design.
1. | Assign Lawn with lake viewLawn with lake view USA costs to activity cost groups and determine the activity rate for each group. |
2. | Estimate the total cost of the VistaVista I work in the office park. how much would it beLawn with lake viewLawn with lake view US offer to perform the job? |
3. | Lawn with lake viewLawn with lake view America does it2727 landscape designs for their clients every year. Estimate the total cost of theVistaVista I work in the office park yesLawn with lake viewLawn with lake view The US allocated landscape design activity costs based on the number of landscape designs rather than the number of landscape design hours. how much would it beLawn with lake viewLawn with lake view US offer to perform the job? Which cost driver do you prefer for the landscape design activity? Because? |
4. | VistaVista office park asksLawn with lake viewLawn with lake view USA to give an estimate for the provision of its services for a period of 2 years. What are the advantages and disadvantages forLawn with lake viewLawn with lake view USA to provide a 2 year estimate? |
Horngrens Cost Accounting A Managerial Emphasis
ISBN: 978-0134475585
16th edition
Authors: Srikant M. Datar, Madhav V. Rajan