Bennette Corporation has provided the following data concerning its overhead costs for the coming year:   Wages and salaries $ 450,000 Depreciation 175,000 Rent 195,000 Total $ 820,000   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 Total Activity Assembly 35,000 labor-hours Order processing 450 orders Other 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 Total Assembly Order Processing Other Wages and salaries 30% 25% 45% 100% Depreciation 15% 45% 40% 100% Rent 35% 30% 35% 100%   The activity rate for the Order Processing activity cost pool is closest to: Multiple Choice $555 per order $545 per order $425 per order $565 per order

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter4: Job Order Costing
Section: Chapter Questions
Problem 7EA: A company estimates its manufacturing overhead will be $750,000 for the next year. What is the...
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Bennette Corporation has provided the following data concerning its overhead costs for the coming year:

 

Wages and salaries $ 450,000
Depreciation 175,000
Rent 195,000
Total $ 820,000

 

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 Total Activity
Assembly 35,000 labor-hours
Order processing 450 orders
Other 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 Total
Assembly Order Processing Other
Wages and salaries 30% 25% 45% 100%
Depreciation 15% 45% 40% 100%
Rent 35% 30% 35% 100%

 

The activity rate for the Order Processing activity cost pool is closest to:

Multiple Choice

$555 per order

$545 per order

$425 per order

$565 per order

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