Columbus Company provides the following ABC costing information: Activities Total Costs Activity-cost drivers Labor $352,000 8,000 hours Gas $8,000 4,000 gallons Invoices $110,000 5,500 invoices Total costs $470,000 The above activities used by their three departments are: Lawn Department Bush Department Plowing Department Labor 3,200 hours 1,200 hours 3,600 hours Gas 1,900 gallons 900 gallons 1,200 gallons Invoices 1,500 invoices 300 invoices 3,700 invoices How much of the gas cost will be assigned to the Lawn Department Group of answer choices $8,000 $3,800 $2,400 $1,800

Respuesta :

Answer:

Columbus Company

The gas cost that will be assigned to the Lawn Department is:

= $3,800.

Explanation:

a) Data and Calculations:

Activities    Total Costs    Activity-cost drivers   Lawn   Bush   Plowing

Labor            $352,000       8,000 hours           3,200  1,200    3,600

Gas                    $8,000       4,000 gallons         1,900    900     1,200

Invoices          $110,000       5,500 invoices       1,500    300    3,700

Total costs    $470,000

Overhead rates:

Labor             $352,000/8,000 hours      = $44 per Labor Hour

Gas                    $8,000/4,000 gallons     = $2 per gallon

Invoices          $110,000/5,500 invoices  = $20 per invoice

Gas cost assigned to the Lawn Department = 1,900 * $2 = $3,800