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QUESTION 1 Christiansen Corporation uses an activity-based costing system with the following three activity cost pools: Activity Cost Pool Fabrication ....... Order processing............ Other Total
QUESTION 1 Christiansen Corporation uses an activity-based costing system with the following three activity cost pools: Activity Cost Pool Fabrication ....... Order processing............ Other Total Activity 70,000 machine-hours 500 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 .. ............. $420,000 160,000 200.000 $780,000 The distribution of resource consumption across activity cost pools is given below: Activity Cost Pools Fabrication Order Processing Other Wages and salaries......... 60% 20% Depreciation. 5% 60% 35% Occupancy...... 25% 50% 25% 20% Total 100% 100% 100% The activity rate for the Order Processing activity cost pool is closest to: $676 per order $780 per order $560 per order $312 per order
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