Question

Rennie Plant Service completed a special landscaping job for Brenton Company. rennie uses ABC and has the following predetermined overhead allocation rates:

Activity Predetermined

Allocation Base Overhead Allocation Rate

Designing Number of designs \( 290 per design

Planting Number of plants \) 20 per plant

The Rennie job included \(1,500 in plants; \)800 in direct labor; one design; and 30 plants.

Requirements

1. What is the total cost of the Brenton job?

Short answer

Total cost of Brenton job: $1,690

Step-by-step solution

Step-by-Step-SolutionStep 1: Total overhead cost

$$\begin{gathered} \mathbf{Design}\mathbf{}\mathbf{cost}\mathbf{=}\mathbf{No}\mathbf{.}\mathbf{}\mathbf{of}\mathbf{}\mathbf{designs}\mathbf{\times }\mathbf{Predetermined}\mathbf{}\mathbf{over}\mathbf{}\mathbf{head}\mathbf{}\mathbf{allocation}\mathbf{}\mathbf{rate} \\ \mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{=}\mathbf{1}\mathbf{\times }\mathbf{\$}\mathbf{290} \\ \mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{=}\mathbf{\$}\mathbf{290} \end{gathered}$$

role="math" localid="1653289750404" $$\begin{gathered} \mathbf{Planting}\mathbf{}\mathbf{cost}\mathbf{=}\mathbf{No}\mathbf{.}\mathbf{}\mathbf{of}\mathbf{}\mathbf{plants}\mathbf{\times }\mathbf{Predetermined}\mathbf{}\mathbf{overhead}\mathbf{}\mathbf{allocation}\mathbf{}\mathbf{rate} \\ \mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{=}\mathbf{30}\mathbf{\times }\mathbf{\$}\mathbf{20} \\ \mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{=}\mathbf{\$}\mathbf{600} \end{gathered}$$

role="math" localid="1653289898905" $$\begin{gathered} \mathbf{Total}\mathbf{}\mathbf{overhead}\mathbf{}\mathbf{cost}\mathbf{=}\mathbf{Design}\mathbf{}\mathbf{cost}\mathbf{+}\mathbf{Planting}\mathbf{}\mathbf{cost} \\ \mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{=}\mathbf{\$}\mathbf{290}\mathbf{+}\mathbf{\$}\mathbf{600} \\ \mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{=}\mathbf{\$}\mathbf{890} \end{gathered}$$

Total cost of Brenton job

$$\begin{gathered} \mathbf{Total}\mathbf{}\mathbf{cost}\mathbf{=}\mathbf{Direct}\mathbf{}\mathbf{labor}\mathbf{}\mathbf{cost}\mathbf{+}\mathbf{Total}\mathbf{}\mathbf{overhead}\mathbf{}\mathbf{cost} \\ \mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{=}\mathbf{\$}\mathbf{800}\mathbf{+}\mathbf{\$}\mathbf{890} \\ \mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{}\mathbf{=}\mathbf{\$}\mathbf{1}\mathbf{,}\mathbf{690} \end{gathered}$$