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

question 35

Multiple Choice

Riverside 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 $180,000 typically perform both tasks; other firm-wide overhead is expected to total $70,000. These costs are allocated as follows: Riverside anticipates making 20,000 bouquets and 4,000 deliveries in the upcoming year.
The cost of wages and salaries and other overhead that would be charged to each bouquet made is:

• A) $7.15.
• B) $8.75.
• C) $12.50.
• D) $13.75.
• E) None of the other answers is correct.

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