Question
2. Bennette Corporation has provided the following data concerning its overhead costs for the coming year: Wages and Salaries $360,000 Depreciation 130,000 Rent 150000 Total
2. Bennette Corporation has provided the following data concerning its overhead costs for the coming year:
| Wages and Salaries | $360,000 |
| Depreciation | 130,000 |
| Rent | 150000 |
| Total | 640000 |
The company has an activity-based costing system with the following three activity cost pools and estimated activity for the coming year:
| Activity Cost Pool | Total Activity |
| Assembly | 40,000 labor hours |
| Order Processing | 450 orders |
| Other | Not applicable |
The Other activity cost pool does not have a measure of activity; it is used to accumulate costs of idle capacity and organization-sustaining costs. The distribution of resource consumption across activity cost pools is given below:
| Activity Cost Pools | ||||
| Assembly | Order Processing | Other | Total | |
| Wages and Salaries | 30% | 25% | 45% | 100% |
| Depreciation | 15% | 45% | 40% | 100% |
| Rent | 35% | 30% | 35% | 100% |
The activity rate for the Assembly activity cost pool is closest to:
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Wiley Federal Government Auditing Laws Regulations Standards And Practices
Authors: Edward F. Kearney, Roldan Fernandez, Jeffrey W. Green, David M. Zavada
2nd Edition
1118555856, 978-1118555859
