Ready Ride is a trucking company. It provides local, short-haul, and long-haul services. It has developed the following three cost pools.
Apply ABC to a service company.
Activity Cost Pools
Cost Drivers
Estimated Overhead
Estimated Use of Cost Driver per Activity
Loading and unloading Number of pieces
$90,000
90,000
Travel Kilometres driven
450,000
600,000
Logistics Hours
75,000
3,000
Instructions
a. Calculate the activity-based overhead rates for each pool.
b. Determine the overhead allocated to Job XZ3275, which has 150 pieces and requires 200 km of driving and 0.75 hours of logistics.
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