Leaper Corporation uses an activity-based costing system with the following three activity cost pools: 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:
The distribution of resource consumption across activity cost pools is given below: The activity rate for the Order Processing activity cost pool is closest to:
A) $1,485 per order
B) $1,540 per order
C) $1,465 per order
D) $1,320 per order

Question

Leaper Corporation uses an activity-based costing system with the following three activity cost pools:  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:
 The distribution of resource consumption across activity cost pools is given below:  The activity rate for the Order Processing activity cost pool is closest to:
A) $1,485 per order 
B) $1,540 per order 
C) $1,465 per order 
D) $1,320 per order

Quizplus · Accepted Answer

Allocations to the Order Processing activity cost pool:
 11eacbfc_c663_8731_8ffe_b527bf71c08e_TB7552_00 Order Processing: $293,000 ÷ 200 orders = $1,465 per order

Leaper Corporation Uses an Activity-Based Costing System with the Following