Problem:
ABC Florists uses an activity-based costing system to compute the cost of making floral bouquets and delivering same to its commercial accounts. Company personnel who earn $200,000 typically perform both tasks; other firm-wide overhead is expected to total $80,000. These costs are allocated as follows:
Production Delivery Other
Wages & Salaries 60% 30% 10%
Other Overhead 50% 35% 15%
ABC anticipates making 20,000 bouquets and 4,000 deliveries in the upcoming year. Cost of wages & salaries and other overhead that would be charged to each delivery made is: