Reference no: EM132536285

Craftsman Inc. manufactures high-quality metal instruments using an activity-based costing system with five activity cost pools. The "Other" activity cost pool is used for all organization-sustaining costs.

Information on these activity cost pools are as follows:

Activity cost pool

Total cost Activity measure                      Total activity

Machining                                                     100,000

Direct Machine hours                                    10, 000 machine hours

Receiving orders                                              $20,000

# of orders                                                    500 orders

Designing                                                       $50,000

Designing hours                                         1,000 designing hours

Customer relation                                          $30,000

# of customers                                             50 customers

Other                                                          $80,000

Not applicable                                             Not applicable

Question 1: What is the activity rate for the activity of receiving orders?

Group of answer choices

Option 1: $10/machine hour

Option 2: $600/order

Option 3: $50/order

Option 4: $40/order