Exam 2, Chopters 5, 78,96 Help Save& ExltSulbmt 4 Bennette Corporation has provi

Question

Exam 2, Chopters 5, 78,96 Help Save& ExltSulbmt 4 Bennette Corporation has provided the following deta concerning Its overhead costs for the coming year Wages and salaries $480,000 Depreciation Rent 190,000 210,000 ts Total $880,000 015t09 The company has an activity-based costing system with the following three activity cost pools and estimated activity for the coming year Activity Cost Pool otal Aceivity labor- Assembly Order processing500 orders Other 30,000 hours Not applicable 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 Activity Cost Pools

Explanation / Answer

Answer is $585 per order Explanation STATEMENT SHOWING FIRST STAGE ALLOCATION OF COST TO ACTIVITY POOL BASIS OF TOTAL Assembly Oder-Proc. Others APPORTION IN $ IN $ IN $ IN $ Wages and salaries 35:30:35 480,000 168,000 144,000 168,000 Depreciation 15:45:40 190,000 28,500 85,500 76,000 rent 35:30:35 210,000 73,500 63,000 73,500 TOTAL COST OF ACTIVITY 400,000 270,000 292,500 317,500 Order-Processing Acticity rate: Activity cost in total 292500 Numbe r of orders 500 Order Processing activity cost per order 585

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