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 | 900 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) | 350 | 200 | ? | 900 |
| Gas (gallons) | 130 | ? | 60 | 400 |
| Invoices (invoices) | ? | 50 | 50 | 250 |
If Riley allocates indirect costs to each division using thethree cost pool above and three allocation rates how much cost willeach division be assigned per gallon of gas used in that division?(In other words, what would be the allocation rate used to assigncosts that are driven by the gallons of gas used?)
