Goertz Corporation has an activity-based costing system with three activity cost pools--Machining, Order Filling, and Other. In the first stage allocations, costs in the two overhead accounts, equipment depreciation and supervisory expense, are allocated to the three activity cost pools based on resource consumption. Data used in the first stage allocations follow: Overhead costs: Equipment depreciation$51,000Supervisory expense$3,000 Distribution of Resource Consumption Across Activity Cost Pools: Activity Cost Pools MachiningOrder FillingOtherEquipment depreciation0.400.100.50Supervisory expense0.200.300.50 Machining costs are assigned to products using machine-hours (MHs) and Order Filling costs are assigned to products using the number of orders. The costs in the Other activity

Question

cost pool are not assigned to products. Activity data for the company's two products follow: Activity: MHs (Machining)Orders (Order Filling)Product J39,100100Product F7900900Total10,0001,000 Finally, the costs of Machining and Order Filling are combined with the following sales and direct cost data to determine product margins. Sales and Direct Cost Data: Product J3Product F7Sales (total)$145,200$90,700Direct materials (total)$81,400$38,600Direct labor (total)$37,700$42,400 The activity rate for the Order Filling activity cost pool under activity-based costing is closest to:

A. $6.00 per order
B. $3.00 per order
C. $54.00 per order
D. $3.33 per order

Answer 1

Answer: A