Escher Company is a wholesale distributor that uses activity-based costing for all of its overhead costs. The company has provided the following data concerning its annual overhead costs and its activity based costing system: The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs. The amount of activity for the year is as follows:
-What would be the total overhead cost per order according to the activity based costing system? In other words,what would be the overall activity rate for the filling orders activity cost pool? (Round to the nearest whole cent. )
A)$54.00
B)$63.00
C)$58.50
D)$56.50

Question

Escher Company is a wholesale distributor that uses activity-based costing for all of its overhead costs. The company has provided the following data concerning its annual overhead costs and its activity based costing system:   The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs. The amount of activity for the year is as follows:
-What would be the total overhead cost per order according to the activity based costing system? In other words,what would be the overall activity rate for the filling orders activity cost pool? (Round to the nearest whole cent. )
A)$54.00 
B)$63.00 
C)$58.50 
D)$56.50

Quizplus · Accepted Answer

Allocations to the Filling Orders activity cost pool:
 11eaa48f_7b87_b030_9e4a_f5971b58b97a_TB2485_00 Cost per order = Total cost of filling orders F1F1F1S1F1F1F10 Number of orders = $226,000 F1F1F1S1F1F1F10 4,000 orders = $56.50 per order

Escher Company Is a Wholesale Distributor That Uses Activity-Based Costing