Whiting Corporation has provided the following data concerning its overhead cost

Question

Whiting Corporation has provided the following data concerning its overhead costs for the coming year:



The company has an activity-based costing system with the following three activity cost pools and estimated activity for the coming year:



The Other activity cost pool does not have a measure of activity; it is used to accumulate costs of idle capacity and organization-sustaining costs.
The distribution of resource consumption across activity cost pools is given below:



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

Explanation / Answer

assembly: wages and salaries: 480,000*.1 = 48,000 Depreciation: 220,000*0.2 = 44,000 Rent: 160,000*0.3 = 48,000 Total: 140,000 $140,000/20,000 labor-hours = $7 per labor-hour Answer: $7.00 per labor-hour

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