The activity rate for the Order Processing activity cost pool is closest to
542
Explanation:
Given that ,
Wages and salaries $540,000
Depreciation $220,000
Rent $240,000
Cost pool for order processing activity
Activity Cost Pools= 30% 25% 45%
= (540,000*30%) +(220,000*25%)+(240,000*45%)
= (162000)+(55000)+(108000)
=325000
Hence ,the Cost pool for order processing activity =325000
We know that the formula for
Activity rate = Cost pool/Total activity
Activity Cost Pool Total Activity Assembly 40,000 labor-hours Order processing 600 orders
= 325,000/600
= 542
The activity rate for the Order Processing activity cost pool is closest to
542