Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Meade Nuptial Bakery makes very elaborate wedding cakes to order. The company has an activity-based costing system with three activity cost pools. The activity rate

Meade Nuptial Bakery makes very elaborate wedding cakes to order. The company has an activity-based costing system with three activity cost pools. The activity rate for the Size-Related activity cost pool is $1.30 per guest. (The greater the number of guests, the larger the cake.) The activity rate for the Complexity-Related cost pool is $36.25 per tier. (Cakes with more tiers are more complex.) Finally, the activity rate for the Order-Related activity cost pool is $84.35 per order. (Each wedding involves one order for a cake.) The activity rates include the costs of raw ingredients such as flour, sugar, eggs, and shortening. The activity rates do not include the costs of purchased decorations such as miniature statues and wedding bells, which are accounted for separately.

Data concerning two recent orders appear below:

Ericson Wedding Haupt Wedding
Number of reception guests 76.00 207.00
Number of tiers on the cake 5.00 7.00
Cost of purchased decorations for cake $ 18.15 $ 77.42

Assuming that the company charges $861.36 for the Haupt wedding cake, what would be the overall margin on the order?

Multiple Choice

  • $684.62

  • $254.93

  • $248.60

  • $176.74

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing And Assurance Services Plus Pearson MyLab Accounting With Pearson EText

Authors: Alvin A. Arens, Randal J. Elder, Mark S. Beasley, Chris E. Hogan

17th Global Edition

1292312106, 978-1292312101

More Books

Students also viewed these Accounting questions