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Allied Corporation is a wholesale distributor that uses activity-based costing for all of its overhead costs. The company has provided the following data concerning its
Allied Corporation is a wholesale distributor that uses activity-based costing for all of its overhead costs. The company has provided the following data concerning its annual overhead costs and its activity-based costing system: Overhead costs: Wages and salaries Other expenses Total $540,000 200,000 $740,000 Distribution of Resource Consumption: Filling Orders Activity Cost Pools Customer Other Support Totall 10% Wages and salaries 80% 10% 100% Other expenses 20% 60% 20% 100% The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs. The amount of activity for the year is as follows: Activity Cost Pool Filling orders Activity 4,000 orders 40 customers Customer support To the nearest whole dollar, how much wages and salaries cost would be allocated to a customer who placed eight orders in a year? $7,474 $9,191 $10,908 $14,948
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