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Edward Company uses activity-based costing for all of its overhead costs. The company has provided the following data concerning its annual overhead costs and its
Edward Company 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.............$620000 Other expenses Total $240,000 $860,000 Distribution of resource consumption: Activity Cost Pools Filling Customer Orders Support Warranty Total Wages and Salaries 30% 60% 10% 100% Other Expenses 45% 35% 20% 100% The amount of activity for the year is as follows: Activity Cost Pools Activity Filling Orders 3000 orders Customer Support 70 customers Warranty 2000 items What would be the total overhead cost per customer according to the activity based costing system? In other words, what would be the overall activity rate for the customer support activity cost pool
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