Lake Street
Plant Service completed a special landscaping job for
BrendanBrendan
Company.
Lake Street
Plant Service uses ABC and has the following predetermined overhead allocation rates: Cost Pool
Allocation Base
Predetermined Overhead Allocation Rate
Designing
Number of designs
$240 per design
Planting
Number of plants
$14 per plant
The Brendan
Company job included
$1,250
in plants (direct materials);
$900
in direct labor; one design; and 50
plants.
1.
What is the total cost of the Brendan
Company job?
2.
If Brendan
Company paid $3,790
for the job, what is the operating income or loss?
3.
If Lake StreetLake Street
Plant Service desires an operating income of 50%
of cost, how much should the company charge for the Brendan
Company job?