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Hisaishi Corporation uses an activity-based costing system with the following three activity cost pools: Activity Cost Pool Fabrication Order processing Others Total Activity 80,000 machine-hours
Hisaishi Corporation uses an activity-based costing system with the following three activity cost pools: Activity Cost Pool Fabrication Order processing Others Total Activity 80,000 machine-hours 400 orders Not applicable 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 and salaries Depreciation Occupancy Total $460,000 180,000 200,000 $840,000 The distribution of resource consumption across activity cost pools is given below: Activity Cost Pools Fabrication Others Total Wages and salaries Depreciation Occupancy 5% 15% 15% Order Processing 80% 40% 50% 15% 45% 35% 100% 100% 100% The activity rate for the Fabrication activity cost pool is closest to: 1) $1 per machine-hour 2) $0.66 per machine-hour 3) $10.50 per machine-hour 4) $1,350 per machine-hour
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