Reference no: EM132521440

Furniture Company uses an activity-based costing system in which there are three activity cost pools. The company has provided the following data concerning its costs and its activity-based costing system:

Costs:

Manufacturing overhead                    $600,000

Selling and administrative expenses       300,000

Total                                             $900,000

Distribution of Resource Consumption:

Activity                                  Cost Pools        Order Size     Customer Support        Other Total

Manufacturing overhead                    45%            50%                5%                     100%

Selling and administrative expenses     40%           45%                15%                    100%

• The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs. You have been asked to complete the first-stage allocation of the costs to the activity cost pools.

Question 1: How much cost, in total, would be allocated in the first-stage allocation to the Order Size activity cost pool?

Multiple Choice

Option 1: $210,000.

Option 2: $240,000.

Option 3: $390,000

Option 4: $300,000.