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Escau Company is a wholesale distributor that uses activity-based costing for all of its overhead costs. The company has provided the following data concerning its
Escau Company 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 Distribution of Resource Consumption: $400,000 100.000 $500,000 Activity Cost Pools Filling Orders Customer Support Other Total Wages and 25% 60% 15% 100% salaries Other expenses 30% 50% 20% 100% L3 The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs. The activity measures for the activity cost pools for the year are as follows: The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs. The activity measures for the activity cost pools for the year are as follows: Activity Cost Pool Filling orders Customer support Activity 3,000 orders 20 customers What would be the total overhead cost per customer according to the activity-based costing system, rounded to the nearest whole dollar? In other words, what would be the overall activity rate for the Customer Support activity cost pool? Multiple Choice $14,500 $12.600
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