Question

Ready Ride is a trucking company. It provides local, short-haul, and long-haul services. It has developed the following three cost pools.

Activity Cost Pool		Cost Drivers		Estimated Overhead		Estimated Use of Cost Driver per Activity
Loading and unloading		Number of pieces		$85,785		90,300
Travel		Miles driven		468,000		585,000
Logistics		Hours		65,520		3,120

Compute the activity-based overhead rates for each pool. (Round answers to 2 decimal places, e.g. 12.75.)

Activity Cost Pool		Activity-Based Overhead Rate
Loading and unloading		$	per piece
Travel		$	per mile
Logistics		$	per hour

  

  

Determine the overhead allocated to Job XZ3275 which has 150 pieces, requires 200 miles of driving, and 0.75 hours of logistics. (Round answer to 2 decimal places, e.g. 12.75.)

Overhead applied to job XZ3275

$Type your answer here

Answer 1

Answer: $318.25

Calculations:

Activity Cost Pool	Estimated Overhead		Estimated Use of Cost driver per activity		=	Activity Rate
		/
Loading and unloading	$85,785	/	90300	Number of pieces	=	$0.95	per piece
Travel	$468,000	/	585000	Miles driven	=	$0.80	per mile
Logistics	$65,520	/	3120	Hours	=	$21.00	per hour

.

	Cost driver	x	Activity Rate	=	Overhead allocated
Loading and unloading	150	x	$0.95	=	$142.50
Travel	200	x	$0.80	=	$160.00
Logistics	0.75	x	$21.00	=	$15.75
Overhead applied to Job XZ3275					$318.25