Escau Corporation is a wholesale distributor that uses activity-based costing for all of its overhead...
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Accounting
Escau Corporation 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
$400,000
Other expenses
190,000
Total
$590,000
Distribution of resource consumption:
Activity Cost Pools
Filling Orders
Customer Support
Other
Total
Wages and salaries
25%
60%
15%
100%
Other expenses
40%
40%
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
Activity
Filling orders
3,900
orders
Customer support
20
customers
What would be the total overhead cost per order according to the activity based costing system? In other words, what would be the overall activity rate for the filling orders activity cost pool? (Round to the nearest whole cent.)
rev: 03_24_2015_QC_CS-11341
$42.14 per order
$40.64 per order
$45.13 per order
$50.77 per order
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