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 OtherWages and salaries 60% 30% 10%Other overhead 50% 35% 15%Skyline anticipates making 20,000 bouquets and 4,000 deliveries in the upcoming year.The cost of wages and salaries and other overhead that would be charged to each bouquet made is:
A. $8.75.
B. $7.15.
C. $12.50.
D. $13.75.
E. None of the answers is correct.
Answer: B
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