Question # 2 (3 - marks) Navpreet Kaur has recently opened a whole sale food distribution business in Brampton, Ontario. She wants to use activity - based costing for all of its over head costs. Navpreet has provided the following data concerning its annual overhead costs and its activity - based costing system. Details provided by Navpreet regarding overhead costs: Delivery + Chief: Wages and Salaries $ 480,000 Other Expenses $ 200,000 TOTAL $680,000 The resource consumption of has the following distribution table: Activity Cost Pools Filling Customer Orders Support Wages and Salaries 30% 60% 100% Other Expenses 45% 20% 100% The Other activity cost pool consists of the costs of idle capacity and organization-sustaining costs. The activity measures for the activity cost pools for the year are as follows: Activity Cost Pool Activities Filling Orders 4,000 orders Customer Support 25 customers Other Total 10% 35% a) Calculate the overall activity rate for Filling Orders activity cost pool, b) Calculate the overall activity rate for Customer Support activity cost pool. c) Calculate wages and salaries cost of the delivery personnel's & chiefs if a customer place seven orders in a year Solution #