Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting

Authors: Robert Kemp, Jeffrey Waybright

5th edition

134727797, 9780134728643 , 978-0134727790

More Books

Students also viewed these Accounting questions

Question

Describe JITs effects on the purchasing function. LO7

Answered: 1 week ago

Question

A greater tendency to create winwin situations.

Answered: 1 week ago

Question

Improving creative problem-solving ability.

Answered: 1 week ago