Bennette Corporation has provided the following data concerning its overhead costs for the coming year:

Wages and salaries	$	520,000
Depreciation		210,000
Rent		230,000
Total	$	960,000

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	30,000	labor-hours
Order processing	500	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	40%	35%		25%	100%
Depreciation	20%	50%		30%	100%
Rent	40%	35%		25%	100%

The activity rate for the Order Processing activity cost pool is closest to:

Multiple Choice

• $725 per order

• $735 per order

• $745 per order

• $574 per order

#2.

Leaper Corporation uses an activity-based costing system with the following three activity cost pools:

Activity Cost Pool	Total Activity
Fabrication	45,000	machine-hours
Order processing	200	orders
Other	Not applicable

The Other activity cost pool is used to accumulate costs of idle capacity and organization-sustaining costs.

The company has provided the following data concerning its costs:

Wages and salaries	$	440,000
Depreciation		180,000
Occupancy		200,000
Total	$	820,000

The distribution of resource consumption across activity cost pools is given below:

	Activity Cost Pools
	Fabrication	Order Processing		Other	Total
Wages and salaries	35%	30%		35%	100%
Depreciation	15%	45%		40%	100%
Occupancy	35%	30%		35%	100%

The activity rate for the Order Processing activity cost pool is closest to:

Garrison 16e Rechecks 2019-07-30

Multiple Choice

• $2,735 per order

• $960 per order

• $1,065 per order

• $1,365 per order

#3

Elfalan Corporation produces a single product. The cost of producing and selling a single unit of this product at the company's normal activity level of 58,000 units per month is as follows:

	Per Unit
Direct materials	$	51.60
Direct labor	$	9.90
Variable manufacturing overhead	$	2.90
Fixed manufacturing overhead	$	20.90
Variable selling & administrative expense	$	5.40
Fixed selling & administrative expense	$	26.00

The normal selling price of the product is $122.10 per unit.

An order has been received from an overseas customer for 3,800 units to be delivered this month at a special discounted price. This order would not change the total amount of the company's fixed costs. The variable selling and administrative expense would be $3.00 less per unit on this order than on normal sales.

Direct labor is a variable cost in this company.

Suppose there is ample idle capacity to produce the units required by the overseas customer and the special discounted price on the special order is $94.40 per unit. The monthly financial advantage (disadvantage) for the company as a result of accepting this special order should be:

Garrison 16e Rechecks 2017-12-15

Multiple Choice

• $25,460

• ($92,000)

• $104,880

• ($84,740)