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Required information Skip to question Tory Company is a wholesale distributor that uses activity-based costing for all of its overhead costs. The company has provided
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Tory Company is a wholesale distributor that uses activity-based costing for all of its overhead costs. The company has provided the following data concerning its annual overhead costs and its activity-based costing system:
Overhead costs: Wages and salaries$600,000Other expenses200,000Total$800,000Distribution of Resource Consumption:
Activity Cost Pools Filling OrdersCustomer SupportOtherTotalWages and salaries30%60%10%100%Other expenses20%60%20%100%The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs. The amount of activity for the year is as follows:
Activity Cost PoolActivityFilling orders3,500 ordersCustomer support35 customersTo the nearest whole dollar, how much wages and salaries cost would be allocated to a customer who placed eight orders in a year?
Multiple Choice
$7,474
$9,191
$10,697
$14,948
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