Question
For its overhead costs, the wholesale distributor Janz Company uses activity-based costing. In terms of the company's annual overhead costs and its activity-based costing system
For its overhead costs, the wholesale distributor Janz Company uses activity-based costing. In terms of the company's annual overhead costs and its activity-based costing system the following data has been provided:
Overhead Costs:
Wages and salaries
$380,000
Non-wage expenses
90,000
Total
$470,000
Distribution of Resource Consumption:
Activity Cost Pools
Filling Orders
Product Support
Other
Total
Wages and salaries
20%
65%
15%
100%
Non-wage expenses
15%
60%
25%
100%
The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs. Shown below is the amount of activity for the year:
Activity Cost Pool
Annual Activity
Filling orders
3,100 orders
Product support
32 products
Other
Not applicable
Required:
Compute the activity rates for the Filling Orders and Product Support activity cost pools
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Accounting Principles Volume 1
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Warren, Lori Novak
8th Canadian Edition
111950242X, 1-119-50242-5, 978-1119502425
