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Goertz Corporation has an activity - based costing system with three activity cost pools - - Machining, Order Filling, and Other. In the first stage
Goertz Corporation has an activitybased costing system with three activity cost poolsMachining, Order Filling, and Other. In the first stage allocations, costs in the two overhead accounts, equipment depreciation and supervisory expense, are allocated to the three activity cost pools based on resource consumption. Data used in the first stage allocations follow:
Overhead costs:
Equipment depreciation $
Supervisory expense $
Distribution of Resource Consumption Across Activity Cost Pools:
Activity Cost Pools
Machining Order Filling Other
Equipment depreciation
Supervisory expense
Machining costs are assigned to products using machinehours MHs and Order Filling costs are assigned to products using the number of orders. The costs in the Other activity cost pool are not assigned to products. Activity data for the company's two products follow:
Activity:
MHs Machining Orders Order Filling
Product J
Product F
Total
Finally, the costs of Machining and Order Filling are combined with the following sales and direct cost data to determine product margins.
Sales and Direct Cost Data:
Product J Product F
Sales total $ $
Direct materials total $ $
Direct labor total $ $
The activity rate for the Order Filling activity cost pool under activitybased costing is closest to
Multiple Choice
$ per order
$ per order
$ per order
$ per order
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