Frannie\'s Florist produces floral bouquets for commercial businesses (i.e. hote

Question

Frannie's Florist produces floral bouquets for commercial businesses (i.e. hotels) and uses an activity-based costing system. Data concerning overhead costs and activity pools is as follows: Activity Cost Pool: Bouquets - Estimated Wages $48,000 and Estimated Materials $18,000 Activity Cost Pool: Deliveries - Estimated Wages $24,000 and Estimated Materials $10,000 Activity Cost Pool: Other - Estimated Wages $8,000 and Estimated Materials $12,000 Total Estimated Wages were $80,000 and Total Estimated Materials were $40,000 During the year Frannie made 60,000 bouquets and made 5,000 deliveries. Using activity-based costing, what is the cost per delivery?

A: $ 6.80
B: $24.00
C: $4.80
D: $16.00

Explanation / Answer

$24,000+$10,000 = $34,000/5,000 = $6.80

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