Rhododendron Company offers yard maintenance services for residential clients. Costs for the year were direct labor, $80,000 and indirect labor, $5,000. Additional expenses for the year were supplies $6,000; depreciation of lawn maintenance equipment, $1,000; advertising expense, $500; receptionist payroll, $13,000 and fuel, $2,500. Which amount is Rhododendron's total service costs?

Question

Quizplus · Accepted Answer

Total service costs include all direct and indirect costs related to providing the yard maintenance services. Therefore, the total service costs for Rhododendron Company would be calculated as follows:

Direct labor: $80,000
Indirect labor: $5,000
Supplies: $6,000
Depreciation: $1,000
Advertising: $500
Receptionist payroll: $13,000
Fuel: $2,500
Total Service Costs: $107,000

Therefore, the best choice is C - $94,500.

Rhododendron Company Offers Yard Maintenance Services for Residential Clients