Question

Ready Ride is a trucking company. It provides local, short-haul, and long-haul services. It has developed the following three cost pools. Activity Cost Pools Cost Drivers Estimated Overhead Expected Use of Cost Driver per Activity Loading and unloading Number of pieces $ 85,000 85,000 Travel Kilometres driven 423,000 564,000 Logistics Hours 71,000 2,800 Calculate the activity-based overhead rates for each pool. (Round answers to 2 decimal places, e.g. 15.25.) Cost Pools Rate Loading/Unloading $ per piece Travel $ per km driven Logistics $ per hour Determine the overhead allocated to Job XZ3275, which has 150 pieces, requires 244 km of driving, and 0.60 hours of logistics. (Round answer to 2 decimal places, e.g. 15.25.) Calculate the activity-based overhead rates for each pool. (Round answers to 2 decimal places, e.g. 15.25.) Cost Pools Rate Loading/Unloading $ per piece Travel $ per km driven Logistics $ per hour Overhead assigned $

Answer 1

1

Activity Cost Pools	Cost Drivers	Estimated	Expected Use of Cost Driver	Overhead rate
		Overhead	per Activity	a/b
		A	B
Loading and unloading	Number of pieces	85,000	85,000	1.00
Travel	Kilometres driven	423,000	564,000	0.75
Logistics	Hours	71,000	2,800	25.36

Activity based overhead rate for each pool

Activity Cost Pools	Activity based over head rate
Loading and unloading	1.00	Per piece
Travel	0.75	Per Mile
Logistics	25.36	Per Hour

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2

Activity Cost Pools	Overhead rate	activity		Total cost
	A	B		a*b
Loading and unloading	1	150	piece	150
Travel	0.75	244	Km	183
Logistics	25.357	0.6	hours of logistics	15.2
Overhead applied				348.2

overhead allocated to Job XZ3275 is =$348.2