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Skyline 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:
Bouquet Production Delivery Other Company personnel 60 % 30 % 10 % Other overhead 50 % 35 % 15 %
Skyline anticipates making 20,000 bouquets and 4,000 deliveries in the upcoming year.
Problem 1: What is the cost of the company personnel's wages and salaries and other overhead that would be charged to each bouquet? (your answer should be under $10.00 per bouquet)
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