Apply ABC to Service Company
We Carry It, Inc. is a trucking company. It provides local, short-haul, and long-haul services. The company has developed the following three cost pools.
| Activity Cost Pools | Cost Drivers | Estimated Overhead | Estimated Use of Cost Drivers per Activity |
| Loading and unloading | Number of pieces | $70,000 | 100,000 pieces |
| Travel | Miles driven | 250,000 | 500,000 miles |
| Logistics | Hours | 60,000 | 2,000 hours |
a. Compute the activity-based overhead rate for each pool.
b. Determine the overhead assigned to Job A1027 which has 150 pieces, requires 200 miles of driving, and 0.75 hours of logistics.
