#9 Mccaskey Corporation uses an activity-based costing system with the following

Question

#9 Mccaskey Corporation uses an activity-based costing system with the following three activity cost pools: Activity Cost Pool Fabrication Total Activity 40,000 machine-hours Order processing Other 500 orders Not applicable 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 Depreciatio Occupancy Total $420,000 100,000 120.000 $640.000 The distribution of resource consumption across activity cost pools is given below: Activity Cost Pools Other 15% 40% 25% Total 100% 100% 100% Fabrication Order Processing Wages and salaries Depreciation Occupancy 1 5% 25% 80% 45% 50% The activity rate for the Fabrication activity cost pool is closest to: $1.65 per machine-hour B. $4.00 per machine-hour C. $0.80 per machine-hour D. $2.40 per machine-hour

Explanation / Answer

Fabrication Order processing Other Total Wages and salaries 21000 336000 63000 420000 Depreciation 15000 45000 40000 100000 Occupancy 30000 60000 30000 120000 Total 66000 441000 133000 640000 Activity rate for fabrication = 66000/40000= 1.65 Option A is correct

Related Questions

Navigate

• Browse (All)
• Browse #
• Subjects

---

---

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