Wanda Florists Uses an Activity-Based Costing System to Compute the Cost

question 15

Multiple Choice

Wanda Florists uses an activity-based costing system to compute the cost of making floral bouquets and delivering the bouquets to its commercial customers. Company personnel who earn $90,000 typically perform both tasks; other firm-wide overhead is expected to total $50,000. These costs are allocated as follows: $\begin{array}{llll}&\text { Bouquet}\\&\text { Production}&\text { Delivery}&\text { Other} \\\hline\text { Wages and }\\\text { Salaries } & 40 \% & 50 \% & 10 \% \\\text { Other overhead } & 60 \% & 25 \% & 15 \%\end{array}$ Wanda anticipates making 30,000 bouquets and 6,000 deliveries in the upcoming year. The cost of wages and salaries and other overhead that would be charged to each bouquet made is:

• A)$2.20.
• B)$3.89.
• C)$4.67.
• D)$5.56.
• E)$18.33.

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