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QUESTION33. Inground Sprinkler Supply sells automatic watering systems for larg...
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QUESTION33. Inground Sprinkler Supply sells automatic watering systems for large and small gardens. The company decided to adopt an Activity-Based Costing system. Last year, the company recorded €1,000,000 in overhead costs related to the following activities.
Activity
|
Cost driver
|
Indirect costs
|
Purchase
|
Number of Purchase Orders
|
€ 350,000
|
Logistics
|
Number of deliveries received
|
€ 200,000
|
Quality inspection
|
Number of inspections
|
€ 450,000
|
The activities for large and small garden systems are as follows:
Large
|
Small
| |
Number of Purchase Orders
|
15,000
|
20,000
|
Number of deliveries received
|
7,500
|
12,500
|
Number of inspections
|
11,500
|
11,000
|
Based on this method, what is the total amount of overhead that Inground Sprinkler Supply should allocate to large garden systems?