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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
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 Other expenses Total $600,000 200,000 $800,000 Distribution of Resource Consumption: Activity Cost Pools Filling Orders Customer Support Other Total Wages and salaries 30% 60% 10% 100% Other expenses 20% 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 Pool Filling orders Customer support Activity 3,500 orders 35 customers To 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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