to accumulate costs of idle capacity and organization-sustaining costs.

to accumulate costs of idle capacity and organization-sustaining costs.

Daniele Corporation uses an
activity-based costing system with the following three activity cost pools:

Activity
Cost Pool

Total
Activity

Fabrication

50,000 machine-hours

Order processing

500 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:

Cost Data

Wages and salaries

$280,000

Depreciation

$200,000

Occupancy

$140,000

Total

$620,000

The distribution of resource
consumption across activity cost pools is given below:


Activity Cost Pools


Fabrication

Order
Processing

Other

Total

Wages and salaries

60%

30%

10%

100%

Depreciation

20%

35%

45%

100%

Occupancy

10%

50%

40%

100%

The activity rate for the
Fabrication activity cost pool is closest to _______ per machine hour.



Price: £ 45

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