Foster Florist specializes in large floral bouquets for hotels and other commerc

Question

Foster Florist specializes in large floral bouquets for hotels and other commercial spaces. The company has provided the following data concening its annual overhead costs and its activity based costing system: Overhead costs: 81,000 71,000 Nages and salaries Other expenses Total $152,000 Activity Cost Pools Making Nages and salaries Other expenses 558 40% Delivery 20% 558 Other 258 58 Total 1008 100 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: Activity Cost Pool Making bouquets Delivery Activity 72,950 bouquets 10,900 deliveries

Explanation / Answer

Calculate cost per delivery :

so answer is c) $5.07

Delivery cost Wages and salaries 81000*20% = 16200 Other expenses 71000*55% = 39050 Total delivery cost 55250 Deliveries 10900 Cost per delivery 5.07

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