Hettich Corporation uses an activity based costing system with the following three activity cost pools:
|
Activity Cost Pool |
Total Activity |
|
Fabrication |
20,000 machine hours |
|
Order processing |
200 orders |
|
Other |
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 |
$480,000 |
|
Depreciation |
120,000 |
|
Occupancy |
200,000 |
|
Total |
$800,000 |
The distribution of resource consumption across activity cost pools is given below:
|
|
Activity Cost Pools |
|||
|
|
Fabrication |
Order Processing |
Other |
Total |
|
Wages and salaries |
55% |
20% |
25% |
100% |
|
Depreciation |
10% |
45% |
45% |
100% |
|
Occupancy |
25% |
40% |
35% |
100% |
The activity rate for the Order Processing activity cost pool is closest to:
A) $1,400 per order
B) $1,600 per order
C) $1,150 per order
D) $800 per order