Question
L Company has provided the following information regarding its activity-based costing system: Department Allocation Base Allocation Rate Purchasing # of purchase orders $300 per order
L Company has provided the following information regarding its activity-based costing system:
| Department | Allocation Base | Allocation Rate |
| Purchasing | # of purchase orders | $300 per order |
| Assembly | # of parts used | $1 per part used |
| Packaging | # of stereos produced | $5 per stereo produced |
1 stereo produced uses 20 parts that cost $1 each and uses $40 of direct labor costs. L Company has an order for 1,000 stereos which will require 5 purchase orders in all.
What is the total cost for the 1,000 stereos?
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Managerial Accounting
Authors: James Jiambalvo
4th edition
9780470546888, 9780470333341, 470546883, 470333340, 978-0470578797
