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Nissley Wedding Fantasy Corporation makes very elaborate wedding cakes to order. The owner of the company has provided the following data concerning the activity rates
Nissley Wedding Fantasy Corporation makes very elaborate wedding cakes to order. The owner of the company has provided the following data concerning the activity rates in its activitybased costing system:
Activity Cost Pools Activity Rate
Sizerelated $ per guest
Complexityrelated $ per tier
Orderrelated $ per order
The measure of activity for the sizerelated activity cost pool is the number of planned guests at the wedding reception. The greater the number of guests, the larger the cake. The measure of complexity is the number of tiers in the cake. The activity measure for the orderrelated cost pool is the number of orders. Each wedding involves one order. 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:
Tijerina Wedding Twersky Wedding
Number of reception guests
Number of tiers on the cake
Cost of purchased decorations for cake $ $
Assuming that the company charges $ for the Twersky wedding cake, what would be the overall margin on the order?
Multiple Choice
$
$
$
$
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