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Hochberg Corporation uses an activity-based costing system with the following three activity cost pools: Activity Cost Pool Total Activity Fabrication 40,000 machine-hours Order processing 500

Hochberg Corporation uses an activity-based costing system with the following three activity cost pools:

Activity Cost Pool Total Activity
Fabrication 40,000 machine-hours
Order processing 500 orders
Other 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 $ 469,000
Depreciation 191,000
Occupancy 120,000
Total $ 780,000

The distribution of resource consumption across activity cost pools is given below:

Activity Cost Pools
Fabricating Order Processing Other Total
Wages and salaries 20% 60% 20% 100%
Depreciation 20% 25% 55% 100%
Occupancy 20% 45% 35% 100%

The activity rate for the Fabrication activity cost pool is closest to:

Noreen 4e Rechecks 2017-24-03

$3.90 per machine-hour

$4.88 per machine-hour

$0.65 per machine-hour

$2.25 per machine-hour

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