QUESTION 2:

Leaper Corporation uses an activity-based costing system with the following three activity cost pools: Activity Cost Pool Fabrication Order processing Other Total Activity machine- 40,000 hours 200 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 $390,000 155,000 175,000 $720,000 The distribution of resource consumption across activity cost pools is given below: Wages and salaries Depreciation Occupancy Activity Cost Pools Fabrication Order Processing 45% 40% 15% 45% 40% 35% Other 15% 40% 25% Total 100% 100% 100% The activity rate for the Order Processing activity cost pool is closest to: Multiple Choice O $1,129 per order O $2,165 per order $1,435 per order $1,086 per order Paparo Corporation has provided the following data from its activity-based costing system: Activity Cost Pool Assembly Processing orders Inspection Total Cost Total Activity $ 926,800 56,000 machine-hours $ 68,310 1,800 orders $ 103,360 1,360 inspection-hours Data concerning the company's product Q79Y appear below: 700 1,060 80 Annual unit production and sales Annual machine-hours Annual number of orders Annual inspection hours Direct materials cost Direct labor cost 20 $51.00 per unit $41.17 per unit According to the activity-based costing system, the average cost of product Q79Y is closest to: Multiple Choice O $123.74 per unit O $92.17 per unit $130.50 per unit $146.67 per unit