What would be the total overhead cost per customer

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Reference no: EM132551061

Escoto Company is a wholesale distributor that uses activity-based costing for all of its overhead costs. The company has provided the following data concerning its annual overhead costs and its activity-based costing system:

Overhead costs:

Wages and salaries$540,000

Other expenses200,000

Total$740,000

Distribution of Resource Consumption:

Activity Cost Pools            Filling Orders          Customer Support             Other            Total

Wages and salaries                 10%                  80%                              10%         100%

Other expenses                     20%                    60%                              20%              100%

The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs. The amount of activity for the year is as follows:

Activity Cost PoolActivity

Filling orders4,000 orders

Customer support40 customers

Question 1 : What would be the total overhead cost per customer according to the activity-based costing system, rounded to the nearest whole dollar? In other words, what would be the overall activity rate for the Customer Support activity cost pool?

Reference no: EM132551061

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