Question
Escau 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
Escau 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 $430,000 Other expenses 220,000 Total $650,000
Distribution of resource consumption:
Activity Cost Pools
Filling Orders Customer
Support Other Total Wages and salaries 30% 60% 10% 100% Other expenses 40% 40% 20% 100%
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 Activity Filling orders 4,200 orders Customer support 20 customers
What would be the total overhead cost per order according to the activity based costing system? In other words, what would be the overall activity rate for the filling orders activity cost pool? (Round to the nearest whole cent.)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started