Copy of Riley's Land Management Company has $27,000 in indirectcosts operating her company. She has identified three activitiesthat drive these indirect cost and created three related cost poolsas detailed below:
| Activities | Costs | Cost-drivers |
| Labor Hours | $24,000 | 1000 hours |
| Gas | $1,800 | 400 gallons |
| Invoices | $1,200 | 250 invoices |
| Total costs | $27,000 | |
Riley has three divisions. Each division uses different amountof the cost driving activities as described below.
| Department | Lawn | Bush | Plowing | Total |
| Labor hours (hours) | 340 | 200 | ? | 1000 |
| Gas (gallons) | 160 | ? | 40 | 400 |
| Invoices (invoices) | ? | 50 | 40 | 250 |
If Riley allocates indirect costs to each division using thethree cost pools above and three allocation rates how much costwill each division be assigned per labor hour worked in thatdivision? (In other words, what would be the allocation rate usedto assign costs that are driven by the number of labor hours?
