Question

In: Accounting

Fogle Florist specializes in large floral bouquets for hotels and other commercial spaces. The company has...

Fogle Florist specializes in large floral bouquets for hotels and other commercial spaces. The company has provided the following data concerning its annual overhead costs and its activity based costing system:

Overhead costs:
Wages and salaries	$159,000
Other expenses	62,000
Total	$221,000

Distribution of resource consumption:
	Activity Cost Pools
	Making Bouquets	Delivery	Other	Total
Wages and salaries	45%	20%	35%	100%
Other expenses	45%	50%	5%	100%

The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs.

The amount of activity for the year is as follows:

Activity Cost Pool	Activity
Making bouquets	124,312 bouquets
Delivery	8,200 deliveries

What would be the total overhead cost per delivery according to the activity based costing system? In other words, what would be the overall activity rate for the deliveries activity cost pool? (Round to the nearest whole cent.)

$5.95 per delivery

$7.66 per delivery

$8.52 per delivery

$7.23 per delivery

Fogle Florist specializes in large floral bouquets for hotels and other commercial spaces. The company has provided the following data concerning its annual overhead costs and its activity based costing system:

Overhead costs:
Wages and salaries	$178,000
Other expenses	51,000
Total	$229,000

Distribution of resource consumption:
	Activity Cost Pools
	Making Bouquets	Delivery	Other	Total
Wages and salaries	45%	20%	35%	100%
Other expenses	30%	65%	5%	100%

The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs.

The amount of activity for the year is as follows:

Activity Cost Pool	Activity
Making bouquets	46,995 bouquets
Delivery	11,800 deliveries

What would be the total overhead cost per bouquet according to the activity based costing system? In other words, what would be the overall activity rate for the making bouquets activity cost pool? (Round to the nearest whole cent.)

$2.01 per bouquets

$1.93 per bouquets

$2.03 per bouquets

$2.08 per bouquets

Expert Solution

Hi

Please let me know in case you face any issue:

ekkarill92 answered 2 years ago

Part 1 A Foster Florist specializes in large floral bouquets for hotels and other commercial spaces....

Part 1 A Foster Florist specializes in large floral bouquets for hotels and other commercial spaces. The company has provided the following data concerning its annual overhead costs and its activity-based costing system: Overhead costs: Wages and salaries $ 70,000 Other expenses 50,000 Total $ 120,000 Distribution of resource consumption: Activity Cost Pools Making Bouquets Delivery Other Total Wages and salaries 70% 20% 10% 100% Other expenses 45% 25% 30% 100% The "Other" activity cost pool consists of the costs...

Skyline Florists uses an activity-based costing system to compute the cost of making floral bouquets and delivering the bouquets to its commercial customers.

Skyline Florists uses an activity-based costing system to compute the cost of making floral bouquets and delivering the bouquets to its commercial customers. Company personnel who earn $180,000 typically perform both tasks; other firm-wide overhead is expected to total $70,000. These costs are allocated as follows: Skyline anticipates making 20,000 bouquets and 4,000 deliveries in the upcoming year. The cost of wages and salaries and other overhead that would be charged to each bouquet made is:

Jill has recently begun working at a local florist. In addition to creating floral arrangements, Jill...

Jill has recently begun working at a local florist. In addition to creating floral arrangements, Jill spends a good deal of her time talking to customers and ringing up sales. Over time, she identifies a weakness in the procedures for ringing up voids. No approval is neces- sary to void a sale, and the void slip collects very little information about the sale. After Jill has completed a sale and the customer has left, she voids the sale and pockets...

) Hector Gonzales runs the Floral Art Company, which supplies floral arrangements to three large supermarket...

) Hector Gonzales runs the Floral Art Company, which supplies floral arrangements to three large supermarket chains throughout Australia. Management has become concerned about the rising costs associated with the process and dispatch of orders. An activity analysis of the indirect costs identified the following customer-related costs. Estimated indirect costs Total expected use of cost driver* Use of cost driver Supermarket customer Acitvity cost pool Cost driver 1 2 3 Orders processing Number of orders $200,000 450 300 100 50...

Hector Gonzales runs the floral art company, which supplies floral arrangements to three large supermarket chains...

Hector Gonzales runs the floral art company, which supplies floral arrangements to three large supermarket chains throughout Australia. Management has become concerned about the rising costs associated with the process and dispatch of orders. An activity analysis of the indirect costs identified the following customer related cost. Use of cost drivers Supermarket customers Activity cost pool Cost driver Estimated indirect costs Total expected use of cost driver** 1 2 3 Orders processing Number of orders $200 000...

Cycle Fit Company is a manufacturer of commercial grade exercise bikes that are sold to hotels...

Cycle Fit Company is a manufacturer of commercial grade exercise bikes that are sold to hotels and health clubs. Maintaining the bikes is an important area of customer satisfaction. Because of increase industry competition, Cycle Fit's financial performance has suffered. However, the introduction of a new model and a predicted upturn in the economy are leading Cycle Fit's managers to predict improved performance in 2021. The following income statement shows results for 2020. Cycle Fit Company Income Statement for the...

Ajax Company is a large retail company that sells clothing, shoes, and other apparel. It has...

Ajax Company is a large retail company that sells clothing, shoes, and other apparel. It has 40 retail outlets located in 22 states. All of the merchandise if purchased by a centralized procurement organization located at the company’s corporate headquarters. There are six purchasing agents with each agent assigned to purchase different types of goods. Each agent works independently with suppliers to get the best deals for the company. The six agents report to the purchasing director. The director oversees...

41. Sperazza Corporation produces large commercial doors for warehouses and other facilities. In the most recent...

41. Sperazza Corporation produces large commercial doors for warehouses and other facilities. In the most recent month, the company budgeted production of 5,700 doors. Actual production was 6,100 doors. According to standards, each door requires 5.4 machine-hours. The actual machine-hours for the month were 33,790 machine-hours. The standard supplies cost is $1.70 per machine-hour. The actual supplies cost for the month was $52,712. Supplies cost is an element of variable manufacturing overhead. The variable overhead efficiency variance for supplies cost...

Sperazza Corporation produces large commercial doors for warehouses and other facilities. In the most recent month,...

Sperazza Corporation produces large commercial doors for warehouses and other facilities. In the most recent month, the company budgeted production of 5,100 doors. Actual production was 5,500 doors. According to standards, each door requires 4.2 machine-hours. The actual machine-hours for the month were 23,540 machine-hours. The standard supplies cost is $1.10 per machine-hour. The actual supplies cost for the month was $24,011. Supplies cost is an element of variable manufacturing overhead. The variable overhead efficiency variance for supplies cost is:...

Lakeview Builders is a construction company (building houses, offices, and hotels) employing a large number of...

Lakeview Builders is a construction company (building houses, offices, and hotels) employing a large number of workers on various construction sites. The internal audit department of Lakeview Builders is currently reviewing cash wages systems within the company. The following information is available concerning the wages systems: (a) Hours worked are recorded using a clocking in/out system. On arriving for work and at the end of each day’s work, each worker enters their unique employee number on a keypad. (b) Workers...