Figure 3-2
A company usually processes 20,000 orders at a total cost of $300,000. During the year, only 16,000 orders were processed.
-Refer to Figure 3-2. What is the cost of unused activity?
A) $300,000
B) $240,000
C) $30
D) $60,000

Question

Quizplus · Accepted Answer

The cost of unused activity can be calculated as follows:
Unused activity = (20,000 - 16,000) x (Total cost / Number of orders)
Unused activity = 4,000 x ($300,000 / 20,000)
Unused activity = $60,000. Therefore, the correct answer is D.

Figure 3-2 A Company Usually Processes 20,000 Orders at a Total Cost