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: Distribution of resource consumption: 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:
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.)

Question

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:  Distribution of resource consumption:  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:
 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.)

Quizplus · Accepted Answer

Allocations to the Making Bouquets activity cost pool:
 11eacbfc_c675_6222_8ffe_cbfa7b191e2a_TB7552_00 Overhead cost per bouquet = Total cost ÷ Number of bouquets
= $71,500 ÷ 40,000 bouquets = $1.79 per bouquet

Foster Florist Specializes in Large Floral Bouquets for Hotels and Other