Question

The service company, Excellent Maids, cleans hotel rooms at resorts on Hilton Head Island. Excellent has identified three activities involved in cleaning. Information on those activities for the month of May follow:

At the Calypso Resort, the company cleaned 900 rooms during March, 1,200 public spaces, changed 1,600 beds, and cleaned 900 bath rooms. Using ABC, how much total overhead is applied to a cleaning job?

Please show your work

Cost Pools

Cost Drivers

Estimated Overhead Cost

Expected Use of Cost Drivers

Changing bed linens

Number of beds

$72,000

48,000 beds

Cleaning bath rooms

Number of bath rooms

64,000

32,000 bath rooms

Other cleaning

Number of hotel rooms and public spaces

45,000

18,000 spaces