FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Allen Company has three departmentd - lawn, bush, and plowing. Allen Company uses ABC for the allocation of its three office costs (labor, gas, invoices) among the three departments. The following information is provided about the office costs.

Activities , total costs, Activity-cost divers

Labor , $320,000, 8,000 hours

Gas, $36,000, 6,000 gallons

Invoices, $40,000, 2,500 invoices

Total costs $396,000

The above activities used by the their three departments are:

Lawn Department labor 2,500 hours, gas 1,700 gallons, invoices 1,600.

Bush department labor 1,200 hours, gas 800 gallons, invoices 400.

Plowing department labor 4,300 hours, gas 3,500 gallons, invoices 500.

How much of the labor cost will be assigned to the Bush Department?

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