Forse 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: 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 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. )

Question

Forse 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:   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 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. )

Quizplus · Accepted Answer

Allocations to the Delivery activity cost pool:
 11eaa0c8_9570_9c75_9cb2_6d4309574aa3_TB2487_00 Overhead cost per delivery = Total cost ÷ Number of deliveries
= $34, 000 ÷ 5, 000 deliveries = $6.80 per delivery

Forse Florist Specializes in Large Floral Bouquets for Hotels and Other