Hettich Corporation uses an activity-based costing system with the following three activity cost pools: Fabrication - 20,000
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Question:
Hettich Corporation uses an activity-based costing system with the following three activity cost pools:
Fabrication - 20,000 machine hours
Order processiong - 200 orders
Other - N/A
The Other activity cost pool is used to accumulate costs of idle capacity and organization-sustaining costs.
The company has provided the following data concerning its costs:
Wages & Salaries - 480,000
Depreciation - 120,000
Occupancy - $200,000
Total Cost - $800,000
The activity rate for the Order Processing activity cost pool is closest to:
A)$1,400 per order B) $1,150 per order C) $800 per order D) $1,600 per order
Can you explain the working or how is this being calculated?
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