Answer:
Columbus Company
The gas cost that will be assigned to the Lawn Department is:
= $3,800.
Explanation:
a) Data and Calculations:
Activities Total Costs Activity-cost drivers Lawn Bush Plowing
Labor $352,000 8,000 hours 3,200 1,200 3,600
Gas $8,000 4,000 gallons 1,900 900 1,200
Invoices $110,000 5,500 invoices 1,500 300 3,700
Total costs $470,000
Overhead rates:
Labor $352,000/8,000 hours = $44 per Labor Hour
Gas $8,000/4,000 gallons = $2 per gallon
Invoices $110,000/5,500 invoices = $20 per invoice
Gas cost assigned to the Lawn Department = 1,900 * $2 = $3,800