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 $ 410,000 Depreciation 165,000 Occupancy 185,000 Total $ 760,000 The distribution of resource consumption across activity cost pools is given below: Activity Cost Pools Fabrication Order Processing Other Total Wages and salaries 35% 30% 35% 100% Depreciation 15% 45% 40% 100% Occupancy 35% 30% 35% 100% The activity rate for the Order Processing activity cost pool is closest to:_______.
a. $1,315 per order
b. $3,382 per order
c. $1685 par order
d. $1190 per order

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abiolataiwo2015 abiolataiwo2015 · Answer 1 · 2021-03-21T01:33:54+01:00

Answer:

c. $1685 per order

Explanation:

Calculation to determine what The activity rate for the Order Processing activity cost pool is closest to

First step is to calculate the Cost pool for order processing activit

Cost pool for order processing activity

= (410,000*30%) +(165,000*45%)+(185,000*30%)

Cost pool for order processing activity=123,000+74,250+55,500

Cost pool for order processing activity= 252,750

Now let calculate the Activity rate using this formula

Activity rate = Cost pool/Total activity

Let plug in the formula

Activity rate= 252,750/150

Activity rate= $1685 per order

Therefore The activity rate for the Order Processing activity cost pool is closest to $1685 per order