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Camilla,Inc AWhat Is the Activity Rate for the Sales Cost Pool

Question 174

Essay

Camilla,Inc.uses activity-based costing to cost its two products: Standard and Deluxe.The company has provided the following data relating to its activities:
 Cost Pools  Estimated Cost  Machine machine-hours $144,000 Cutting number of cuts $536,000 Sales number of orders $108,000\begin{array}{ll}\textbf { Cost Pools } & \textbf { Estimated Cost } \\\hline \text { Machine machine-hours } & \$ 144,000 \\\text { Cutting number of cuts } & \$ 536,000 \\\text { Sales number of orders } & \$ 108,000\end{array}  Expected Activity  Standard  Deluxe  Machine hours 1,0007,000 Number of cuts 3,0005,000 Number of orders 7,0002,000\begin{array}{lll} &\textbf{ \underline{Expected Activity} } \\&\underline{\textbf { Standard }} \quad \underline{\textbf { Deluxe }} \\\text { Machine hours } & 1,000 \quad\quad\quad\quad 7,000 \\\text { Number of cuts } & 3,000 \quad\quad \quad\quad5,000 \\\text { Number of orders } & 7,000 \quad\quad\quad\quad 2,000\end{array}
a.What is the activity rate for the sales cost pool?
b.If actual activity is the same as that estimated,what is the total amount of overhead cost allocated to the Deluxe product?

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a.$108,000/9,000 = $12 per order
b.Machi...

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