Question
Electricity: $20,000, Depreciation: $10,000, Rent: $30,000 Overhead costs will be assigned to activities on the basis of the factors given below OH COST DRIVER Electricity
Electricity: $20,000, Depreciation: $10,000, Rent: $30,000
Overhead costs will be assigned to activities on the basis of the factors given below
OH
COST DRIVER
Electricity ($20,000)
No. of lamp
Depreciation ($10,000)
No. of machinery
Rent ($30,000)
M2
The additional information can be given as follows:
A1
A2
A3
A4
No. of lamp
100
200
400
100
No. of machinery
400
300
1,500
300
M2
500
500
100
500
No of orders
100
200
100
500
No of transactions
400
200
200
300
As a second stage cost driver; assume that A1 and A2 use no of orders , A3 and A4 use no of transactions so what is the activity rate of A4 (According to the Activity Based Costing System)
Select one:
a. $17.875
b. $43.58
c. $30
d. $30.58
e. $27.875
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Financial and Managerial Accounting the basis for business decisions
Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello
16th edition
978-0078111044
