Hochberg Corporation uses an activity-based costing system with the following th

Question

Hochberg Corporation uses an activity-based costing system with the following three activity cost pools:

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:

The distribution of resource consumption across activity cost pools is given below:

The activity rate for the Fabrication activity cost pool is closest to:

$3.90 per machine-hour

$2.25 per machine-hour

$0.65 per machine-hour

$4.88 per machine-hour

Activity Cost Pool Total Activity Fabrication 40,000 machine-hours Order processing 500 orders Other Not applicable

Explanation / Answer

Wages and salaries (469000*20%) 93800 Depreciation (191000*20%) 38200 occupancy (120000*20%) 24000 total cost allocated to fabrication department 156000 Activity rate = 156000/40,000 3.9 per machine hour answer

Related Questions

Navigate

• Browse (All)
• Browse H
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.